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Electoral Institutions and Electoral Cycles in Investment Incentives: A Field Experiment on Over 3,000 U.S. Municipalities

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  • Nathan M. Jensen
  • Michael G. Findley
  • Daniel L. Nielson

Abstract

Through a field experiment and audit study, we test how the electoral calendar affects the use of local economic development policies. We explore how electoral timing along with local political institutions and party composition affect local governments’ offers of investment incentives to outside firms. We legally incorporated a consultancy and, on behalf of a real investor in manufacturing, approached roughly 3,000 U.S. municipalities with inquiries. The main experimental results show no greater tendency to offer incentives for investment anticipated prior to than after elections—a null result that is estimated with high precision. Limiting the sample to municipalities that specialize in manufacturing, the relevant subgroup, suggests that election timing matters in this most likely set of locales. Some observational findings include additional evidence on how direct elections of executives and partisanship correlate with incentive offers.

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  • Nathan M. Jensen & Michael G. Findley & Daniel L. Nielson, 2020. "Electoral Institutions and Electoral Cycles in Investment Incentives: A Field Experiment on Over 3,000 U.S. Municipalities," American Journal of Political Science, John Wiley & Sons, vol. 64(4), pages 807-822, October.
    • Handle: RePEc:wly:amposc:v:64:y:2020:i:4:p:807-822
    DOI: 10.1111/ajps.12499
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    Cited by:

    1. Nicholas R. Jenkins & Michelangelo Landgrave & Gabriel E. Martinez, 2020. "Do political donors have greater access to government officials? Evidence from a FOIA field experiment with US municipalities," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 3(2).
    2. Basistha, Ahana & Dhillon, Amrita & Chaudhuri, Arka Roy, 2024. "Elections and Rural Road Construction: Evidence from India," CAGE Online Working Paper Series 712, Competitive Advantage in the Global Economy (CAGE).
    3. Aycan Katitas & Sonal Pandya, 2024. "Investment incentives attract foreign direct investment: evidence from the great recession," Public Choice, Springer, vol. 200(1), pages 323-345, July.
    4. Köhler, Ekkehard & Matsusaka, John G. & Wu, Yanhui, 2023. "Street-level responsiveness of city governments in China, Germany, and the United States," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 640-652.

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