IDEAS home Printed from https://ideas.repec.org/a/eee/moneco/v60y2013i5p554-567.html
   My bibliography  Save this article

The impact of unions on municipal elections and urban fiscal policies

Author

Listed:
  • Sieg, Holger
  • Wang, Yu

Abstract

The efficient decentralized provision of public goods requires that special interest groups, such as municipal unions, do not exercise undue influence on the outcome of municipal elections and local fiscal policies. We develop a new political economy model in which a union can endorse one of the candidates in a local election. A politician that prefers an inefficiently large public sector can, therefore, win an election if the union can provide sufficiently strong support during the campaign. We have assembled a unique data set that is based on union endorsements that are published in leading local newspapers. Our empirical analysis focuses on municipal elections in the 150 largest cities in the U.S. between 1990 and 2012. We find that challengers strongly benefit from endorsements in competitive elections. Challengers that receive union endorsements and successfully defeat an incumbent also tend to adopt more union friendly fiscal policies.

Suggested Citation

  • Sieg, Holger & Wang, Yu, 2013. "The impact of unions on municipal elections and urban fiscal policies," Journal of Monetary Economics, Elsevier, vol. 60(5), pages 554-567.
    • Handle: RePEc:eee:moneco:v:60:y:2013:i:5:p:554-567
    DOI: 10.1016/j.jmoneco.2013.04.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304393213000573
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jmoneco.2013.04.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    2. Alan S. Gerber & Dean Karlan & Daniel Bergan, 2009. "Does the Media Matter? A Field Experiment Measuring the Effect of Newspapers on Voting Behavior and Political Opinions," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 35-52, April.
    3. Richard B. Freeman & Casey Ichniowski, 1988. "When Public Sector Workers Unionize," NBER Books, National Bureau of Economic Research, Inc, number free88-1.
    4. Fernando Ferreira & Joseph Gyourko, 2009. "Do Political Parties Matter? Evidence from U.S. Cities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 399-422.
    5. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
    6. Coate, Stephen & Morris, Stephen, 1995. "On the Form of Transfers in Special Interests," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1210-1235, December.
    7. Freeman, Richard B. & Ichniowski, Casey (ed.), 1988. "When Public Sector Workers Unionize," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226261669.
    8. Dennis Epple & Holger Sieg, 1999. "Estimating Equilibrium Models of Local Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 645-681, August.
    9. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-858, August.
    10. James Bennett & William Orzechowski, 1983. "The voting behavior of bureaucrats: Some empirical evidence," Public Choice, Springer, vol. 41(2), pages 271-283, January.
    11. Stephen M. Calabrese & Dennis N. Epple & Richard E. Romano, 2012. "Inefficiencies from Metropolitan Political and Fiscal Decentralization: Failures of Tiebout Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(3), pages 1081-1111.
    12. Elhanan Helpman & Gene M. Grossman, 1999. "Competing for Endorsements," American Economic Review, American Economic Association, vol. 89(3), pages 501-524, June.
    13. Caroline Minter Hoxby, 1996. "How Teachers' Unions Affect Education Production," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 671-718.
    14. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922, October.
    15. Courant, Paul N & Gramlich, Edward M & Rubinfeld, Daniel L, 1979. "Public Employee Market Power and the Level of Government Spending," American Economic Review, American Economic Association, vol. 69(5), pages 806-817, December.
    16. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630, Elsevier.
    17. James M. Snyder & David Strömberg, 2010. "Press Coverage and Political Accountability," Journal of Political Economy, University of Chicago Press, vol. 118(2), pages 355-408, April.
    18. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(2), pages 265-286.
    19. Richard B. Freeman & Robert Valletta, 1988. "The Effects of Public Sector Labor Laws on Labor Market Institutions and Outcomes," NBER Chapters, in: When Public Sector Workers Unionize, pages 81-106, National Bureau of Economic Research, Inc.
    20. Dennis Epple & Thomas Romer & Holger Sieg, 2001. "Interjurisdictional Sorting and Majority Rule: An Empirical Analysis," Econometrica, Econometric Society, vol. 69(6), pages 1437-1465, November.
    21. Lewis, H Gregg, 1990. "Union/Nonunion Wage Gaps in the Public Sector," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 260-328, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eric Brunner & Joshua Hyman & Andrew Ju, 2020. "School Finance Reforms, Teachers' Unions, and the Allocation of School Resources," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 473-489, July.
    2. Bagchi, Sutirtha, 2019. "The effects of political competition on the generosity of public-sector pension plans," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 439-468.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Feiveson, Laura, 2015. "General revenue sharing and public sector unions," Journal of Public Economics, Elsevier, vol. 125(C), pages 28-45.
    2. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    3. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630, Elsevier.
    4. Rebecca Diamond, 2017. "Housing Supply Elasticity and Rent Extraction by State and Local Governments," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 74-111, February.
    5. Gravel, Nicolas & Oddou, Rémy, 2014. "The segregative properties of endogenous jurisdiction formation with a land market," Journal of Public Economics, Elsevier, vol. 117(C), pages 15-27.
    6. Holmes, Thomas J. & Sieg, Holger, 2015. "Structural Estimation in Urban Economics," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 69-114, Elsevier.
    7. Matthew Davis & Fernando V. Ferreira, 2017. "Housing Disease and Public School Finances," NBER Working Papers 24140, National Bureau of Economic Research, Inc.
    8. Dennis Epple & Brett Gordon & Holger Sieg, 2010. "Drs. Muth And Mills Meet Dr. Tiebout: Integrating Location‐Specific Amenities Into Multi‐Community Equilibrium Models," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 381-400, February.
    9. Davis, Matthew & Ferreira, Fernando, 2022. "Housing disease and public school finances," Economics of Education Review, Elsevier, vol. 88(C).
    10. Kevin M. O'Brien, 1997. "Do Municipal Residency Laws Affect Labour Market Outcomes?," Urban Studies, Urban Studies Journal Limited, vol. 34(11), pages 1759-1769, November.
    11. Michael F. Lovenheim, 2009. "The Effect of Teachers' Unions on Education Production: Evidence from Union Election Certifications in Three Midwestern States," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 525-587, October.
    12. Kurt Schmidheiny, 2002. "Income Stratifcation in Multi-Community Models," Diskussionsschriften dp0215, Universitaet Bern, Departement Volkswirtschaft.
    13. Epple, Dennis & Romano, Richard & Sieg, Holger, 2012. "The intergenerational conflict over the provision of public education," Journal of Public Economics, Elsevier, vol. 96(3), pages 255-268.
    14. Sigrid Roehrs & David Stadelmann, 2010. "Mobility and local income redistribution," Working Papers 2010/4, Institut d'Economia de Barcelona (IEB).
    15. Calabrese, Stephen & Epple, Dennis & Romano, Richard, 2023. "Majority choice of taxation and redistribution in a federation," Journal of Public Economics, Elsevier, vol. 217(C).
    16. repec:zbw:bofrdp:2009_014 is not listed on IDEAS
    17. Florian Kuhlmey & Beat Hintermann, 2019. "The welfare costs of Tiebout sorting with true public goods," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(5), pages 1166-1210, October.
    18. Schmidheiny, Kurt, 2006. "Income segregation and local progressive taxation: Empirical evidence from Switzerland," Journal of Public Economics, Elsevier, vol. 90(3), pages 429-458, February.
    19. Roller, Marcus, 2016. "Effective Tax Rates and Effective Progressivity in a Fiscally Decentralized Country," CEPR Discussion Papers 11152, C.E.P.R. Discussion Papers.
    20. Brülhart, Marius & Bucovetsky, Sam & Schmidheiny, Kurt, 2015. "Taxes in Cities," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1123-1196, Elsevier.
    21. Jerch, Rhiannon & Kahn, Matthew E. & Li, Shanjun, 2017. "The efficiency of local government: The role of privatization and public sector unions," Journal of Public Economics, Elsevier, vol. 154(C), pages 95-121.
    22. Jesse M. Rothstein, 2006. "Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions," American Economic Review, American Economic Association, vol. 96(4), pages 1333-1350, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:moneco:v:60:y:2013:i:5:p:554-567. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505566 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.