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Tax shape, debt and electoral opportunism at the municipal level: French empirical evidence and a model (?)

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  • Marie-Estelle Binet

    ()

  • Jean-Sébastien Pentecote

    ()

Abstract

Firstly, this paper aims at building a theoretical framework in order to explain opportunistic local public behaviors on the eve of elections. The resulting electoral cycle depends on the tax shape, the avalability to contract loans, and the shape of the demand for public goods. In particular, the model predicts a tax cut during the election period in French municipalities. Indebtedness may lead to an electoral cycle on public spending provided that the public good demand is elastic enough. Secondly, empirical investigation relying on a dynamic panel data model confirms theoretical predictions.

Suggested Citation

  • Marie-Estelle Binet & Jean-Sébastien Pentecote, 2003. "Tax shape, debt and electoral opportunism at the municipal level: French empirical evidence and a model (?)," ERSA conference papers ersa03p28, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa03p28
    as

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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa03/cdrom/papers/28.pdf
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    References listed on IDEAS

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    1. Besley, Timothy & Case, Anne, 1995. "Incumbent Behavior: Vote-Seeking, Tax-Setting, and Yardstick Competition," American Economic Review, American Economic Association, vol. 85(1), pages 25-45, March.
    2. Bergstrom, Theodore C & Goodman, Robert P, 1973. "Private Demands for Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 280-296, June.
    3. repec:cup:apsrev:v:71:y:1977:i:04:p:1467-1487_26 is not listed on IDEAS
    4. Werner W. Pommerehne & Bruno S. Frey, 1976. "Two Approaches To Estimating Public Expenditures," Public Finance Review, , vol. 4(4), pages 395-407, October.
    5. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
    6. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    7. Turnbull, Geoffrey K & Mitias, Peter M, 1999. "The Median Voter Model across Levels of Government," Public Choice, Springer, vol. 99(1-2), pages 119-138, April.
    8. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
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