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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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Related research

Keywords: H2; H3; H7; D72;

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References

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  1. 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.
  2. Sam Peltzman, 1988. "How Efficient Is the Voting Market?," University of Chicago - George G. Stigler Center for Study of Economy and State 53, Chicago - Center for Study of Economy and State.
  3. 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.
  4. 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.
  5. Anne Case, 1993. "Interstate tax competition after TRA86," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 136-148.
  6. Peltzman, Sam, 1987. "Economic Conditions and Gubernatorial Elections," American Economic Review, American Economic Association, vol. 77(2), pages 293-97, May.
  7. 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.
  8. 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.
  9. Federico Revelli, 2005. "On Spatial Public Finance Empirics," International Tax and Public Finance, Springer, vol. 12(4), pages 475-492, August.
  10. 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).
  11. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135.
  12. Suzuki, Motoshi, 1994. " Evolutionary Voter Sophistication and Political Business Cycles," Public Choice, Springer, vol. 81(3-4), pages 241-61, December.
  13. 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.
  14. 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.
  15. 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.
  16. 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.
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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. 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).
  3. Chiara Dalle Nogare & Matteo M Galizzi, 2008. "The Political Economy of Cultural Spending: Evidence from Italian Cities," Working Papers 0818, University of Brescia, Department of Economics.

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