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Voters prefer more qualified mayors, but does it matter for public finances? Evidence for Germany

Author

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  • Ronny Freier

    () (DIW Berlin
    FU Berlin)

  • Sebastian Thomasius

    () (FU Berlin
    German Federal Ministry of Finance)

Abstract

Abstract This paper studies the importance of politicians’ qualification, in terms of education and experience, for fiscal outcomes. The analysis is based on a large panel for 2031 German municipalities for which we have collected information on municipal budgets as well as the election results and qualification levels of mayoral candidates. We principally use a regression discontinuity design focusing on close elections to estimate causal effects. We find that mayors with prior experience in office have a tendency to reduce the level of local public debt, lower total municipal expenditures and decrease the local taxes, even though these results are only significant in some specifications. In contrast, the education level of the mayor exerts no significant effects on the overall fiscal performance of the municipality. The results are partly surprising as both education and experience are shown to matter greatly in the electoral success of mayoral candidates.

Suggested Citation

  • Ronny Freier & Sebastian Thomasius, 2016. "Voters prefer more qualified mayors, but does it matter for public finances? Evidence for Germany," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(5), pages 875-910, October.
    • Handle: RePEc:kap:itaxpf:v:23:y:2016:i:5:d:10.1007_s10797-015-9382-z
    DOI: 10.1007/s10797-015-9382-z
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    Citations

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    Cited by:

    1. Fabiana Rocha & Veronica Orellano, Karina Bugarin, 2016. "Local public finances in Brazil: are mayoral characteristics important?," Working Papers, Department of Economics 2016_04, University of São Paulo (FEA-USP).
    2. Stefanie Gaebler & Felix Roesel, 2019. "Do direct elections matter? Quasi-experimental evidence from Germany," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(6), pages 1416-1445, December.
    3. Dilla, Diana, 2017. "Staatsverschuldung und Verschuldungsmentalität
      [Public Debt and Debt Mentality]      ," MPRA Paper 79432, University Library of Munich, Germany.
    4. Stadelmann, David & Portmann, Marco & Eichenberger, Reiner, 2015. "Military careers of politicians matter for national security policy," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 142-156.
    5. André Schultz & Alexander Libman, 2015. "Is there a local knowledge advantage in federations? Evidence from a natural experiment," Public Choice, Springer, vol. 162(1), pages 25-42, January.
    6. Harry Pickard, 2018. "Does Congressional experience in US governors influence state transfers?," Working Papers 2018014, The University of Sheffield, Department of Economics.
    7. Freier, Ronny, 2015. "The mayor's advantage: Causal evidence on incumbency effects in German mayoral elections," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 16-30.
    8. repec:eee:poleco:v:53:y:2018:i:c:p:186-204 is not listed on IDEAS
    9. Fuchs, Andreas & Richert, Katharina, 2015. "Do Development Minister Characteristics Affect Aid Giving?," Working Papers 0604, University of Heidelberg, Department of Economics.
    10. Veronica Ines Fernandez Orellano & Fabiana Rocha & Karina Bugarin, 2018. "Local Public Finances In Brazil: Are Mayoral Characteristics Important?," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 70, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    11. Jochimsen, Beate & Thomasius, Sebastian, 2014. "The perfect finance minister: Whom to appoint as finance minister to balance the budget," European Journal of Political Economy, Elsevier, vol. 34(C), pages 390-408.
    12. Felix Arnold, 2015. "Turnout and Closeness: Evidence from 60 Years of Bavarian Mayoral Elections," Discussion Papers of DIW Berlin 1462, DIW Berlin, German Institute for Economic Research.
    13. Jan Fałkowski & Grażyna Bukowska, 2016. "Monopolizacja władzy a wyniki gospodarcze na poziomie Polski lokalnej," Gospodarka Narodowa, Warsaw School of Economics, issue 2, pages 91-120.
    14. Scharfenkamp Katrin, 2016. "It’s About Connections – How the Economic Network of the German Federal Government Affects the Top Earners’ Average Income Tax Rate," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(4), pages 427-453, August.
    15. Schild, Christopher-Johannes, 2013. "Do female mayors make a difference? Evidence from Bavaria," FAU Discussion Papers in Economics 07/2013, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    16. Marco Portmann & David Stadelmann, 2013. "Testing the Median Voter Model and Moving Beyond its Limits: Do Characteristics of Politicians Matter?," CREMA Working Paper Series 2013-05, Center for Research in Economics, Management and the Arts (CREMA).

    More about this item

    Keywords

    Mayoral elections; Regression discontinuity design; Politician’s education and experience; Fiscal outcomes;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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