Lame ducks and local fiscal policy: Quasi-experimental evidence from Portugal
Journal
The Economic Journal
Type
journal article
Date Issued
2020-02
Author(s)
Abstract (De)
I use the introduction of mayoral term limits in Portugal to identify how an exogenous variation in eligibility for office affects policy decisions. Relying on a quasi-experimental difference-in-differences approach, I find that term-limited incumbents pursue more conservative fiscal policies than those who are eligible for re-election. Heterogeneous effects show that the treatment effects primarily reflect the behaviour of right-leaning, term-limited incumbents. Results are in line with a model in which right-leaning officeholders try to maintain a good reputation by pleasing an electorate prone to redistribution while they are eligible, but adopt policies closer to their true preferences when term limited.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
Yes
Volume
130
Number
626
Start page
511
End page
533
Subject(s)
Eprints ID
259805