We examine whether partisan political differences have important effects on policy outcomes at the local level using a new panel data set of mayoral elections in the United States. Applying a regression discontinuity design to deal with the endogeneity of the mayor's party, we find that party labels do not affect the size of government, the allocation of spending or crime rates, even though there is a large political advantage to incumbency in terms of the probability of winning the next election. The absence of a strong partisan impact on policy in American cities, which is in stark contrast to results at the state and federal levels of government, appears due to certain features of the urban environment associated with Tiebout sorting. In particular, there is a relatively high degree of household homogeneity at the local level that appears to provide the proper incentives for local politicians to be able to credibly commit to moderation and discourages strategic extremism.
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Length: Date of creation: Oct 2007 Date of revision: Handle: RePEc:nbr:nberwo:13535
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Find related papers by JEL classification: H7 - Public Economics - - State and Local Government; Intergovernmental Relations R38 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Government Policies; Regulatory Policies
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Justin Wolfers & Eric Zitzewitz, 2004.
"Prediction Markets,"
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Wolfers, Justin & Zitzewitz, Eric, 2004.
"Prediction Markets,"
Research Papers
1854, Stanford University, Graduate School of Business.
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Gilles Duranton & Matthew A. Turner, 2007.
"Urban growth and transportation,"
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tecipa-305, University of Toronto, Department of Economics.
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