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Political Selection and Economic Policy

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  • Jaakko Meriläinen

Abstract

Does political selection matter for policy in representative governments? I use administrative data on local politicians in Finland and exploit exogenous variation generated by close elections to show that electing more high-income, incumbent and competent politicians (who earn more than observably similar politicians) improves fiscal sustainability outcomes, but does not decrease the size of the public sector. I also provide suggestive evidence that electing more university-educated local councillors leads to more public spending without adverse effects on fiscal sustainability. I reconcile these findings with survey data on candidate ideology and demonstrate that different qualities are differentially associated with economic ideology.

Suggested Citation

  • Jaakko Meriläinen, 2022. "Political Selection and Economic Policy," The Economic Journal, Royal Economic Society, vol. 132(648), pages 3020-3046.
    • Handle: RePEc:oup:econjl:v:132:y:2022:i:648:p:3020-3046.
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    File URL: http://hdl.handle.net/10.1093/ej/ueac035
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    Cited by:

    1. Cipullo, Davide & Reslow, André, 2022. "Electoral cycles in macroeconomic forecasts," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 307-340.
    2. Sørensen, Rune J., 2023. "Educated politicians and government efficiency: Evidence from Norwegian local government," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 163-179.
    3. Fiva, Jon H. & Izzo, Federica & Tukiainen, Janne, 2024. "The gatekeeper’s dilemma: Political selection or team effort," Journal of Public Economics, Elsevier, vol. 234(C).

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