Incumbency, turnout, and impact of legislature size on government spending : evidence from Italian municipalities

De Benedetto, Marco Alberto (2018) Incumbency, turnout, and impact of legislature size on government spending : evidence from Italian municipalities. Doctoral thesis, Birkbeck, University of London.

Abstract

My thesis focuses on some of the determinants of electoral participation (input side of democratic legitimacy) and on the effect of legislature size on the quality of government (output side of democratic legitimacy). In chapter 1 I analyze how having an incumbent among candidates affects electoral turnout, by using a data set providing information on the results of Italian municipal elections over the period 1993-2011. Endogeneity issues are handled through an instrumental variable approach using the mayor term-limit as an instrument for the presence of the incumbent mayor among candidates. I find that the impact of incumbency is heterogeneous across geographical areas. I speculate that the north-south divergence is related to differences in social capital and in clientelistic relationships established by incumbent politicians. In chapter 2, I examine the personal incumbency effect at a local level in Italy over the period 1993-2011, by applying a non-parametric Sharp Regression Discontinuity Design that compares candidates who barely win an election to those who barely lose, exploiting the fact that incumbency status changes discontinuously at the threshold of margin of victory of zero. I find that incumbents are more likely to win the competition compared to their challengers at the Italian municipal elections. Also, the effect of interest seems to be larger in magnitude for municipalities located in the North of Italy compared to southern municipalities. Finally, in chapter 3 I study the effect of council size on municipal expenditures by using a rich data set providing information on Italian municipal budgets over the period 2001-2007. By implementing a Sharp Regression Discontinuity Design, I find a negative relationship between local government size, as measured by total expenditures per capita, and the council size. Similar results are found when I consider expenditures that are more directly under the control of bureaucrats, such as current expenditures per capita. Finally, I test the "law of 1/n" on pork barrel policies, finding again a negative effect of council size on capital expenditures per capita. Keywords: Incumbency; Political Competition; Electoral Turnout; Social Capital; Government Size; Legislature Size; Law of 1/n; Instrumental Variable; Natural Experiment; Sharp RDD. JEL classification: D72, D78; J71; J16 ; J45

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