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Political Competition, Tax Salience and Accountability: Theory and Some Evidence from Italy

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  • Emanuele Bracco
  • Francesco Porcelli
  • Michela Redoano

Abstract

This paper argues that high political competition does not necessarily induce policy makers to perform better as previous research has shown. We develop a political economy model and we show that when political competition is tight, and elected politicians can rely on more tax instruments, they will substitute salient taxes with less salient ones, which are not necessarily preferable. These predictions are largely confirmed using a dataset on Italian municipal elections and taxes.

Suggested Citation

  • Emanuele Bracco & Francesco Porcelli & Michela Redoano, 2013. "Political Competition, Tax Salience and Accountability: Theory and Some Evidence from Italy," CESifo Working Paper Series 4167, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4167
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    Cited by:

    1. repec:eee:poleco:v:49:y:2017:i:c:p:146-163 is not listed on IDEAS
    2. Alberto Batinti & Andrea Filippetti & Luca Andriani, 2017. "Why Does Social Capital Increase Government Performance? The Role of Local Elections across Italian Municipalities," Management Working Papers 13, Birkbeck Department of Management, revised Apr 2017.
    3. Bordignon, Massimo & Grembi, Veronica & Piazza, Santino, 2017. "Who do you blame in local finance? An analysis of municipal financing in Italy," European Journal of Political Economy, Elsevier, vol. 49(C), pages 146-163.
    4. Emanuele Bracco, 2017. "A Fine Collection: The Political Budget Cycle of Traffic Enforcement," Working Papers 209919534, Lancaster University Management School, Economics Department.
    5. Atsuyoshi Morozumi & Francisco José Veiga & Linda Gonçalves Veiga, "undated". "Electoral effects on the composition of public spending and revenue: evidence from a large panel of countries," Discussion Papers 2014/16, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    6. Altemeyer-Bartscher, Martin, 2014. "Fiscal Equalization, Tax Salience, and Tax Competition," IWH Discussion Papers 3/2014, Halle Institute for Economic Research (IWH).
    7. Altemeyer-Bartscher, Martin & Zeddies, Götz, 2017. "Bracket creeps: Bane or boon for the stability of numerical budget rules?," IWH Discussion Papers 29/2016, Halle Institute for Economic Research (IWH).
    8. Sutirtha Bagchi, 2013. "The Effects of Political Competition on the Funding and Generosity of Public-Sector Pension Plans," 2013 Papers pba941, Job Market Papers.

    More about this item

    Keywords

    political competition; government; accountability; tax salience;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-

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