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Local government fiscal policy, social capital and electoral payoff: evidence across Italian municipalities

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  • Batinti, Alberto
  • Andriani, Luca
  • Filippetti, Andrea

Abstract

Citizens’ attitudes and reactions to policymakers’ decisions depend on several factors, including informal institutions. The novelty of this paper is to use social capital as a moderator factor to shed light on the relationship between fiscal policies and electoral outcomes. We investigate this relationship using a sample of 6,000 Italian municipalities over the period 2003-2012 and use a Conditional Logit Matching model comparing incumbents to challengers’ characteristics within each election. We find that social capital increases the odds of the re-election of incumbent mayors who adopted a local fiscal policy more oriented towards capital investment (versus current expenditure) and towards property tax (versus income surcharge). This suggests that social capital encourages governmental functions and public policies improving long-term economic commitments, institutional transparency, and accountability. It also shows that decentralization works relatively better with social capital.

Suggested Citation

  • Batinti, Alberto & Andriani, Luca & Filippetti, Andrea, 2019. "Local government fiscal policy, social capital and electoral payoff: evidence across Italian municipalities," LSE Research Online Documents on Economics 100438, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:100438
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    File URL: https://researchonline.lse.ac.uk/id/eprint/100438/
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    Cited by:

    1. Giuseppe Albanese & Emma Galli & Ilde Rizzo & Carla Scaglioni, 2021. "Transparency, civic capital and political accountability: A virtuous relation?," Kyklos, Wiley Blackwell, vol. 74(2), pages 155-169, May.
    2. Luciano Mauro & Francesco Pigliaru, 2024. "Italy’s National Recovery and Resilience Plan: Will it Narrow the North–South Productivity Gap?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 10(3), pages 1281-1307, November.
    3. Giuseppe Terzo, 2021. "Social capital, social economy and economic resilience of Italian provinces," Papers in Regional Science, Wiley Blackwell, vol. 100(5), pages 1113-1135, October.
    4. Nadia Jacobi & Vito Amendolagine, 2023. "What feeds on what? Networks of interdependencies between culture and institutions," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(2), pages 371-412, July.
    5. Mariarosaria Agostino & Sabrina Ruberto, 2023. "Family Ties, Social Capital and Small Businesses’ Efficiency. Evidence from the Italian Food Sector," Journal of Family and Economic Issues, Springer, vol. 44(4), pages 935-955, December.
    6. Filippetti, Andrea & Vezzani, Antonio, 2022. "The political economy of public research, or why some governments commit to research more than others," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    7. Giuseppe Albanese & Emma Galli & Ilde Rizzo & Carla Scaglioni, 2019. "Building the Glass House: Transparency and Civic Capital across Italian municipalities," Working papers 84, Società Italiana di Economia Pubblica.

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    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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