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Political determinants of municipal accounts: Quasi-experimental evidence from Portugal

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  • Lopes da Fonseca, Mariana

Abstract

This study investigates the impact of electing a majority in a municipality's legislative body on different items of the local current and capital accounts. Inference is based on a RDD approach and a dataset containing electoral and financial information for a sample of 278 homogeneous municipalities over 32 years. Results provide evidence of a significant causal impact of treatment on the most relevant items of the current and capital revenue and expenditure accounts. In particular, municipalities ruled by a legislative majority raise more revenues through current and capital transfers, but also have higher expenditures with personnel and investment goods.

Suggested Citation

  • Lopes da Fonseca, Mariana, 2015. "Political determinants of municipal accounts: Quasi-experimental evidence from Portugal," Center for European, Governance and Economic Development Research Discussion Papers 238, University of Goettingen, Department of Economics.
  • Handle: RePEc:zbw:cegedp:238
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    Keywords

    public finance; absolute majority;

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