Posts categorized under Local Government

Lame duck politicians and fiscal policy

February 3, 2022
Does the introduction of term limits affect policymaking? Elections have a salutary disciplining effect as long as they urge politicians to act on behalf of the electorate. If politicians place too high a value on holding office, consequences may yet be pernicious. To boost their probability of re-election, politicians may end up favoring policies that are popular among voters instead of those they would otherwise promote. Once ineligible, they have fewer incentives to please the electorate.

Political cycles in municipal revenue forecasts

January 27, 2022
Recent studies suggest that governments use overly optimistic revenue forecasts to expand their fiscal room for maneuver in election years in order to increase their chances of re-election. This paper starts by providing a theory for this observation that is based on the assumption that uninformed voters mistake the fiscal activity of the government for competence. As a result, the budget is expanded in election years, but cut in off-election years.

Local property tax reform and municipality spending efficiency

January 25, 2022
Local governments provide a plethora of public services. To finance themselves, local municipalities rely on self-generated revenues, mostly on taxation. At the same time voters usually advocate for tax and expenditure limitations. Voters’ desire to lower the price while wishing to maintain the existing level of public services, can be interpreted as pressure on local governments for increased efficiency. This study assesses the short-term impact on municipal efficiency that stems from the 2008 property tax reform.

Voter turnout in municipal elections

October 19, 2021
Electoral participation in Portugal has been decreasing across all elections being below 60% in recent times. This study asks if the number of elected representatives in an election for Town Council is related with voter turnout. To motivate the analysis, the paper constructs an index that proxies for each voter’s voting power defined as the ratio of the number of seats in the Town Council to the number of voters in the municipality.

Who should you vote for? Or, what makes a good mayor?

September 14, 2021
According to a survey ran by the Portuguese Electoral Behavior Project after the local elections in 2001 and 2005, around 50% of the Portuguese inquired voted for the party they preferred and did not take into account other characteristics of its head candidate. Bourdain (2008) explains that these electors voted for the party of preference and not the head candidate because they believed that being a representative of a given political party is the most important characteristic of a politician for policy outcomes.

Was local government efficiency affected by the Troika’s intervention in Portugal?

December 1, 2020
A decentralization process is underway in Portugal with the increased attribution of competencies to local governments hoping to benefit from efficiency gains. However, during the Troika intervention, the austerity measures adopted by the Portuguese government impacted the functioning of local administrations. This paper studies the efficiency in local governments and its drivers and provides empirical evidence about the impact of Troika’s intervention on the Portuguese municipalities. The paper evaluates the efficiency of the 278 mainland municipalities by relating the cost of providing public services to the quantity of services provided.

Local territorial reform and regional spending efficiency

September 12, 2019
Quite often, one encounters arguments advocating that mergers or amalgamation of territorial units are a pathway to reduce public spending and increase efficiency, pointing to advantages of economies of scale in the provision of public services. However, this article argues that these advantages might have been oversold. The article assesses the changes on municipal efficiency that stem from the 2013 Portuguese local territorial reform that reduced the number of local governments and parishes by around 29%.