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Do re-election probabilities influence public investment?

Listed author(s):
  • Jon Fiva

    (Universitetet i Oslo)

  • Gisle James Natvik

    (Norges Bank)

We identify exogenous variation in incumbent policymakers’ re-election probabilities and explore empirically how this variation affects their investments in physical capital. Our results indicate that a higher re-election probability leads to higher investments, particularly in the purposes preferred more strongly by the incumbents. This aligns with a theoretical framework where political parties disagree about which public goods to produce using labor and predetermined public capital.

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File URL: https://economicdynamics.org/meetpapers/2010/paper_334.pdf
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Paper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 334.

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Date of creation: 2010
Handle: RePEc:red:sed010:334
Contact details of provider: Postal:
Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/
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