Manager or professional politician? Local fiscal autonomy and the skills of elected officials. Regional Science and Urban Economics, Volume 83, July 2020.

We provide a theoretical and empirical assessment of why local fiscal autonomy can affect the skills of elected officials in sub-national governments. We first develop a model of politics with different types of politicians and show that -- following a tax decentralization reform increasing local fiscal autonomy -- politicians with high administrative skills are elected in rich jurisdictions while politicians with high political skills are elected in poor ones. As a result, voter welfare increases only, or mainly, in rich jurisdictions. We then look for empirical support to these predictions by exploiting the decentralization reforms affecting Italian municipalities in the '90s. These reforms introduced both the direct election of the mayor and new autonomous tax tools for municipalities characterized by large differences in their tax bases. Our estimates -- robust to several alternative stories -- emphasize a differential change in elected officials at the municipal level between rich and poor jurisdictions. These findings provide a new explanation for the observed poor performance of local governments largely financed by grants.

Jan 2020

Do national political parties matter? Evidence from Italian municipalities. European Journal of Political Economy, Volume 63, June 2020.

LINKS

EJPE

Recently several countries have experienced a drop in popularity of national political parties, accompanied by the success of independent movements (e.g. “Civic Lists” in Italy). I exploit the success of “Civic Lists” in Italian municipalities and use them as a comparison group for party-affiliated politicians, to test whether national parties affect fiscal discipline. Using a Regression Discontinuity Design (RDD), I show that party-affiliated mayors are more fiscally responsible: they run lower deficits, accumulate less debt and reduce expenditures. The effect is significant only for municipalities not constrained by fiscal rules. This suggests that national parties act as a substitute for fiscal rules in constraining politicians. Besides, I provide evidence that the discipline of party-affiliated politicians is linked to better career prospects: party-affiliated mayors have a higher probability of being re-elected and better chances of being promoted to higher levels of government. Alternative stories find less support in the data.

working papers

Aug 2020

Is this the real life or just fantasy? Refugee reception, extreme-right voting, and broadband internet [submitted]

with

M. Luca, M. Viskanic and A. Romarri

LINKS

How does the reception of refugees affect the electoral performance of extreme-right parties? Does the effect change across areas with heterogeneous access to broadband internet? Using data on Italian refugee centers and an instrumental variable approach based on pre-existing group accommodation buildings, we show that hosting refugees leads to a decrease in extreme-right parties' vote shares. We estimate that municipalities that opened a refugee center between the 2013 and the 2018 national elections experienced a change in the votes shares of extreme-right parties approximately 7 percentage points lower than municipalities that did not open a refugee center. The negative effect is stronger for municipalities that opened smaller refugee centers and with lower access to broadband internet.

Jun 2020

Immigration, Occupational Choice and Electoral Rules. Theory and Evidence on Dual Ballot Openness [submitted]

with

M. Morelli and M. Negri

links

CEPR working paper 14896

Do institutions affect the level of openness of immigration policies? We study theoretically and empirically how different electoral systems affect the reception of refugees, comparing Single Round Plurality with Dual Ballot systems. We focus on mayoral elections at the municipality level. Our model predicts that municipalities that elect the mayor with a Dual Ballot system receive more refugee-related fiscal transfers from the central government and are more likely to host refugees, compared to municipalities that use a Single Round Plurality system. Using data from Italian municipalities and regression discontinuity design, we provide empirical evidence that confirms the predictions of the theoretical model.

Jun 2020

Fiscal rules and the selection of politicians: evidence from Italian municipalities [submitted]

AWARD

Winner of the EEA Young Economist Award at the 2017 Annual Meeting of the European Economic Association – Motivation letter here

LINKS

Despite the wide adoption, there is little evidence on the consequences of fiscal rules for the quality of government. I use data from Italian municipalities to study how fiscal rules affect the selection of politicians. In 1999, the Italian government applied fiscal rules to all municipalities. In 2001, it removed them for municipalities with less than 5000 inhabitants. Using a Difference-in-Discontinuity design, which enables control for an institutionally mandated increase in the wage paid to politicians at the 5000 inhabitants threshold, I show that fiscal rules negatively affect politicians' level of education. The result highlights a trade-off to fiscal rules. Reducing policymaking discretion may alleviate inter-jurisdictional externalities, but it may also lower the quality of the political class.

Dec 2019

Stop invasion! The electoral tipping point in anti-immigrant voting [new version coming soon]

with

M. Bordignon, E. Slerca and G. Turati

LINKS

Why do anti-immigrant political parties have more success in areas that host fewer immigrants? Using regression discontinuity design, structural breaks search methods and data from a sample of Italian municipalities, we show that the relationship between the vote shares of anti-immigrant parties and the share of immigrants follows a U-shaped curve, which exhibits a tipping-like behavior around a share of immigrants equal to 3.35 %. We estimate that the vote share of the main Italian anti-immigrant party (Lega Nord) is approximately 6 % points higher for municipalities below the threshold. Using data on local labor market characteristics and on the incomes of natives and immigrants, we provide evidence which points at the competition in the local labor market between natives and immigrants as the more plausible explanation for the electoral success of anti-immigrant parties in areas with low shares of immigrants. Alternative stories find less support in the data.

Apr 2019

Not welcome anymore: the effect of electoral incentives on the reception of refugees [new version coming soon]

media coverage

lavoce.info

LINKS

Do electoral incentives affect immigration policies? I study this question in the setting of Italian municipalities making decisions about the reception of refugees. The localized control of the reception policy, combined with the exogenous timing of policy decisions and staggered elections, enables me to study the effect of electoral incentives on the reception of refugees. Although municipalities receive fiscal grants for hosting refugees, I find that the probability of opening a reception centre is 24 per cent lower for municipalities in the final year of the electoral term (i.e. just before new elections), compared to municipalities in other years of the term. The results suggest that electoral incentives may induce politicians to make decisions that are potentially detrimental from an economic perspective.