Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/66867
Authors: 
Freier, Ronny
Odendahl, Christian
Year of Publication: 
2012
Series/Report no.: 
Discussion Papers, German Institute for Economic Research, DIW Berlin 1239
Abstract: 
The number of parties in government is usually considered to increase spending. We show that this is not necessarily the case. Using a new method to detect close election outcomes in multi-party systems, we isolate truly exogenous variation in the type of government. With data from municipalities in the German state of Bavaria, we show in regression discontinuity-type estimations that absolute majorities spend more, not less, and increase the property tax rate. We also find weakly significant results for increases in debt. Politically, our results show that the mayor that heads an absolute majority of his own party gains the most, but the party itself does not.
Subjects: 
fiscal spending
local election
absolute majority
municipality data
regression discontinuity
JEL: 
H11
H71
H72
H74
Document Type: 
Working Paper

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