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Lame Ducks and Local Fiscal Policy: Quasi-Experimental Evidence from Portugal

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  • Mariana Lopes da Fonseca

Abstract

I use the introduction of mayoral term limits in Portugal to identify how an exogenous variation in eligibility for office affects policy decisions. Relying on a quasi-experimental difference-in-differences approach, I find that term-limited incumbents pursue more conservative fiscal policies than those who are eligible for re-election. Heterogeneous effects show that the treatment effects primarily reflect the behaviour of right-leaning, term-limited incumbents. Results are in line with a model in which right-leaning officeholders try to maintain a good reputation by pleasing an electorate prone to redistribution while they are eligible, but adopt policies closer to their true preferences when term limited.

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  • Mariana Lopes da Fonseca, 2020. "Lame Ducks and Local Fiscal Policy: Quasi-Experimental Evidence from Portugal," The Economic Journal, Royal Economic Society, vol. 130(626), pages 511-533.
    • Handle: RePEc:oup:econjl:v:130:y:2020:i:626:p:511-533.
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    File URL: http://hdl.handle.net/10.1093/ej/uez042
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    Cited by:

    1. Jon H. Fiva & Oda Nedregård, 2022. "How Does Party Discipline Affect Legislative Behavior? Evidence from Within-Session Variation in Lame Duck Status," CESifo Working Paper Series 9697, CESifo.

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