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Yardstick competition: which neighbours matter?

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  • Eric Dubois

    ()

  • Sonia Paty

    ()

Abstract

This paper aims at testing the existence of yardstick competition by estimating a fully specified vote-function on a panel data set of 104 French local governments from 1989 to 2001. When comparing the performance of their incumbent to the one of their "neighbours", voters might consider their close geographical neighbours but also the nearby cities that are similar according to some socio-economic characteristics such as population size. The estimation results show that voters sanction their incumbent if their own local housing tax is high. Moreover, we find that voters reward their incumbent when neighbouring cities that are similar in terms of demographic characteristics have high local taxes.

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Bibliographic Info

Article provided by Springer in its journal The Annals of Regional Science.

Volume (Year): 44 (2010)
Issue (Month): 3 (June)
Pages: 433-452

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Handle: RePEc:spr:anresc:v:44:y:2010:i:3:p:433-452

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Keywords: H2; H3; H7; D72;

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References

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  1. Peltzman, Sam, 1990. "How Efficient Is the Voting Market?," Journal of Law and Economics, University of Chicago Press, vol. 33(1), pages 27-63, April.
  2. Timothy Besley & Anne Case, 1992. "Incumbent Behavior: Vote Seeking, Tax Setting and Yardstick Competition," NBER Working Papers 4041, National Bureau of Economic Research, Inc.
  3. Federico Revelli, 2005. "On Spatial Public Finance Empirics," International Tax and Public Finance, Springer, vol. 12(4), pages 475-492, August.
  4. Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, vol. 52(3), pages 285-307, October.
  5. Suzuki, Motoshi, 1994. " Evolutionary Voter Sophistication and Political Business Cycles," Public Choice, Springer, vol. 81(3-4), pages 241-61, December.
  6. Eric Dubois & Matthieu Leprince & Sonia Paty, 2007. "The Effects of Politics on Local Tax Setting: Evidence from France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00800688, HAL.
  7. Núria Bosch & Albert Solé, 2004. "Yardstick competition and the political costs of raising taxes: An empirical analysis of Spanish municipalities," Working Papers 2004/5, Institut d'Economia de Barcelona (IEB).
  8. Frey, Bruno S & Schneider, Friedrich, 1978. "A Politico-Economic Model of the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(350), pages 243-53, June.
  9. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135.
  10. Peltzman, Sam, 1987. "Economic Conditions and Gubernatorial Elections," American Economic Review, American Economic Association, vol. 77(2), pages 293-97, May.
  11. Massimo Bordignon & Floriana Cerniglia & Federico Revelli, 2002. "In Search for Yardstick Competition: Property Tax Rates and Electoral Behavior in Italian Cities," CESifo Working Paper Series 644, CESifo Group Munich.
  12. Anne Case, 1993. "Interstate tax competition after TRA86," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 136-148.
  13. Revelli, Federico, 2002. "Local taxes, national politics and spatial interactions in English district election results," European Journal of Political Economy, Elsevier, vol. 18(2), pages 281-299, June.
  14. Antoine Auberger & Eric Dubois, 2005. "The influence of local and national economic conditions on French legislative elections," Public Choice, Springer, vol. 125(3), pages 363-383, December.
  15. Chappell, Henry W, Jr, 1983. "Presidential Popularity and Macroeconomic Performance: Are Voters Really So Naive?," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 385-92, August.
  16. Jan Vermeir & Bruno Heyndels, 2006. "Tax policy and yardstick voting in Flemish municipal elections," Applied Economics, Taylor & Francis Journals, vol. 38(19), pages 2285-2298.
  17. Alvarez, Michael R. & Saving, Jason, 1995. "Deficits, Democrats, and Distributive Benefits: Congressional Elections and the Pork Barrel in the 1980s," Working Papers 928, California Institute of Technology, Division of the Humanities and Social Sciences.
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Citations

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Cited by:
  1. Cassette, Aurélie & Farvaque, Etienne, 2014. "Are elections debt brakes? Evidence from French municipalities," Economics Letters, Elsevier, vol. 122(2), pages 314-316.
  2. Enlinson Mattos & Ricardo Politi, 2014. "Pro-poor tax policy and yardstick competition: a spatial investigation for VAT relief on food in Brazil," The Annals of Regional Science, Springer, vol. 52(1), pages 279-307, January.
  3. Maria Teresa Balaguer-Coll & María Isabel Brun-Martos & Anabel Forte & Emili Tortosa-Ausina, 2014. "Determinants of local governments'­ reelection: New evidence based on a Bayesian approach," Working Papers 2014/06, Economics Department, Universitat Jaume I, Castellón (Spain).
  4. Chiara Dalle Nogare & Matteo Galizzi, 2011. "The political economy of cultural spending: evidence from Italian cities," Journal of Cultural Economics, Springer, vol. 35(3), pages 203-231, August.

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