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    Why does social capital increase government performance? The role of local elections across Italian municipalities

    Batinti, A. and Filippetti, Andrea and Andriani, Luca (2017) Why does social capital increase government performance? The role of local elections across Italian municipalities. Working Paper. Birkbeck College, University of London, London, UK.

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    Abstract

    There is wide consensus that social capital increases government performance. However, the very mechanism underlying the relationship between social capital and well - performing governments remains unclear. In this paper we focus on the budgetary compositio n of local governments and find that the joint effect of larger social capital and higher quality in government’s spending improves the re - election chances of incumbent policy makers. By looking at 8,000 Italian municipalities over the period 2003 - 2012, we show that incumbent mayors who carry out a forward - looking and transparent fiscal agenda are more likely to be reelected where the level of local social capital is larger. In contexts with larger social capital, we obtain a non - trivial average effect of a 54% larger probability to be reelected when a more forward - looking agenda is in place. Thus, the good conduct of incumbent mayors is rewarded, but only in contexts with more social capital. Twin estimates considering a more transparent fiscal agenda are n ot significant but show the predicted sign and the comparable size of a 31% larger probability. Our evidence is robust when controlling for the political budget cycle, and provides ground for further exploration of the electoral mechanism as an important c hannel to explain the connection between social capital and good government performance.

    Metadata

    Item Type: Monograph (Working Paper)
    Additional Information: BWPMA 1701, ISSN: 2052-0581
    Keyword(s) / Subject(s): local re-election, social capital, selection of politicians, government performance, fiscal federalism
    School: Birkbeck Schools and Departments > School of Business, Economics & Informatics > Management
    Research Centre: Innovation Management Research, Birkbeck Centre for, Corporate Governance and Ethics, London Centre for
    Depositing User: Administrator
    Date Deposited: 24 Sep 2018 08:34
    Last Modified: 24 Sep 2018 08:34
    URI: http://eprints.bbk.ac.uk/id/eprint/23998

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