Do national political parties matter? Evidence from Italian municipalities |
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Institution: | 1. Dipartimento di Scienze per l’Economia e l’Impresa (DISEI), Università degli Studi di di Firenze, Via delle Pandette 32, 50127, Firenze, Italy;2. Dipartimento di Scienze Economiche, Aziendali e Statistiche (SEAS), Università degli Studi di Palermo, Viale delle Scienze, 90128, Palermo, Italy;3. Dipartimento Scienze Politiche LUISS Guido Carli, Viale Romania, 32, 00197, Roma, Italy;1. Etla Economic Research, Finland;2. Ministry of Economic Affairs and Employment, Finland;3. University of Helsinki, Finland;1. Department of Humanities and Social Sciences, Indian Institute of Technology Dharwad, Karnataka, 580011, India;2. Department of Economic Sciences, Indian Institute of Technology Kanpur, Uttar Pradesh, 208016, India |
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Abstract: | 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. |
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Keywords: | Party affiliation Independent politicians Fiscal discipline Fiscal rules Local government finance RDD D72 H70 H72 |
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