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Working paper No. 240 Bloc – party Politics and Economic Outcomes. What Are the Effects of Local Parties?

Author

Listed:
  • Lakomaa, Erik

    (Stockholm School of Economics)

  • Korpi, Martin

    (The Ratio institute)

Abstract

In a much cited 2008 article, Per Pettersson-Lidbom uses regression discontinuity to test for Swedish party effects on economic policies such as municipal taxation, spending and employment. We reassess the issue using the same estimator as Pettersson-Lidbom but new data on all factual coalitions, including minority coalitions as well as those previously deemed as undefined on a left and right wing political scale (constituting about 20 percent of the sample used in Pettersson-Lidbom’s study). This makes it possible to remove a systematic bias against centre-right coalitions in Pettersson-Lidbom’s study. We find that a majority of the previous findings stand, with sometimes even slightly stronger effects, but not as regards the proportional income tax rate and number of government employees per capita. Parties seem to matter for economic outcomes, but not always, and some parties more than others.

Suggested Citation

  • Lakomaa, Erik & Korpi, Martin, 2014. "Working paper No. 240 Bloc – party Politics and Economic Outcomes. What Are the Effects of Local Parties?," Ratio Working Papers 240, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0240
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Democracy; Voting behaviour; Economic policy; Political systems;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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