Fiscal rules, or constraints on the policymaking discretion of elected officials, are widely used to regulate fiscal policies. Using data on Italian municipalities, we employ a difference-in-discontinuity design to provide evidence of the negative effect of fiscal rules on mayoral candidates’ education. Municipalities in which fiscal rules meaningfully restrict the action space of politicians drive the effect. These results are consistent with a formal model of fiscal rules and political selection. We highlight that reducing discretion may affect the composition of the pool of players: it may alleviate pork-barrel spending but also negatively affect the education of politicians.

We study whether a better knowledge of the functioning of pay-as-you-go pension systems and recent demographic trends in the hosting country affects natives’ attitudes towards immigration. In two online experiments in Italy and Spain, we randomly treated participants with a video explaining how, in pay-as-you-go pension systems, the payment of current pensions depends on the contributions paid by current workers. The video also explains that the ratio between the number of pensioners and the number of workers in their countries will grow substantially in the future. We find that the treatment improves participants’ knowledge about how a pay-as-you-go system works and the future demographic trends in their country. However, we find that only treated participants who support non-populist parties display more positive attitudes towards migrants, even though the treatment increases knowledge of pension systems and demographic trends for all participants.

We study the effect of economic insecurity on electoral outcomes using data on municipal elections in Italy. We implement a difference-in-differences approach that exploits exogenous variation across municipalities in the share of inactive workers due to the economic lockdown introduced by the central government to deal with the Covid-19 pandemic. We show that lockdown-induced economic insecurity positively affected the electoral performance of progressive and left-wing parties, while it negatively affected conservative and far-right parties. Conversely, we find no effect for the populist Five Star Movement, local independent parties (i.e., Civic Lists), and electoral turnout. We provide evidence that extraordinary economic measures introduced by the central government to compensate workers for the economic insecurity can explain this shift in partisanship toward the left and the increasing support for pro-EU parties, away from euro-skeptic and populist forces.

We use data from Italy to study the political and social impact of a refugee reception policy (SPRAR) directly managed by local governments, whose features recall the conditions of the contact theory (Allport, 1954). Instrumental variables estimates indicate that municipalities that opened a refugee center between the 2013 and 2018 national elections experienced a change in the vote shares of extreme-right parties approximately 7 percentage points lower compared to towns that did not open a refugee center. We document that the positive impact of SPRARs on “compositional amenities” (i.e., local schools) and population growth allows explaining the negative impact on anti-immigrants’ prejudice. Finally, we provide evidence of spillovers in prejudice reduction in neighboring municipalities without a SPRAR.

Do electoral incentives affect immigration policies? Exploiting the Italian system for refugees’ reception and data from Italian municipalities, we show that proximity to elections reduces the probability that a municipality applies to host a refugee center by 26%, despite the economic benefits arising from these centers. Low electoral competition and high shares of extreme-right voters drive the effect. Our results are rationalized by a theoretical model and can explain the unequal distribution of refugees across and within countries.

Large migrant inflows have spurred anti-immigrant sentiment, but can small inflows have a different impact? We exploit the redistribution of migrants after the dismantling of the "Calais Jungle" in France to study the impact of the exposure to few migrants, which we estimate using difference-in-differences and instrumental variables. We find that in the presence of a migrant center (CAO), the growth rate of vote shares for the main far-right party (Front National (FN), our proxy for antiimmigrant sentiment) between 2012 and 2017 is reduced by about 12 percentage points. This effect, which crucially depends on the inflow’s size, points towards the contact hypothesis (Allport, 1954).

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.

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.

We explore the impact of connections between politics and business on the profile of political candidates and their policy decisions. Specifically, we examine the effects of anti-revolving door laws, which enforce a waiting period (“cooling-off”) before former politicians can hold significant roles in the bureaucracy or state-owned enterprises. We build a political agency model with endogenous selection into politics where those “politically connected outside options” (PCOs) are available to politicians. We show that a reduction in their expected value is relatively more costly for candidates with a lower human capital, thus it increases the share of high human capital candidates. At the same time, it increases the likelihood of equilibria where low human capital politicians choose to pander toward the voters’ prior. Empirically, we test those predictions using Italian municipality-level data. We exploit a population threshold in the application of an anti-revolving door policy that introduces a cooling-off period. Using a difference-in-discontinuity approach, we show that the cooling-off period increases the average education of candidates and elected mayors. We also show that the reform reduces the incentives to choose policies that may be electorally costly, but only for low human capital mayors.

The factors determining the allocation of renewable energy facilities and their effects are questions of growing interest. Using data on all wind farms and solar farms installed in Spain and electoral results at the municipal level from 1991 to 2019, we conduct a diff-in-diff event-study to determine the effect of siting these facilities on different electoral outcomes. Our findings reveal that siting a wind farm results in an electoral loss of 2.2 percentage points for the party incumbent at the regional level, while the local incumbent faces no significant punishment. However, when we perform heterogeneity estimation based on political alignment, the electoral loss increases to 4.8% for the party holding office at the regional level on those municipalities in which both layers of government are aligned, while the local incumbent in aligned municipalities experience a 2.2% loss of their vote-share.

Institutions matter for the political choice of policies. We study, theoretically and empirically, how different electoral systems affect the immigration policy of a country or city, zooming on the labor market as the main source of heterogeneous economic preferences on immigration. The general result is that a polity is more open to immigration the less likely it is that policymaking can be determined by a single group of voters constituting a plurality winning party but not holding an absolute majority. There is evidence for this result at all levels in terms of correlations, and we establish causality via regression discontinuity design for the Italian case.

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.