Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/200678
Authors: 
Banaszewska, Monika
Bischoff, Ivo
Year of Publication: 
2018
Series/Report no.: 
Joint Discussion Paper Series in Economics 22-2018
Abstract: 
We want to find out whether grants-in-aid help the recipient government to get re-elected. We take Poland as our testing ground and analyze the impact of EU funds spent within a municipality on mayoral elections in 2010 and 2014. We employ an instrumental variables approach to account for the endogeneity of EU funds. Our results show that EU funds do not generally increase the mayors' chance of reelection. This result holds for total EU funds spent as well as for funds spent on investments. We test whether the impact of EU funds is moderated by municipal characteristics. We find no effect for the economic or fiscal situation of municipalities, a positive but economically negligible effect for human capital endowment and a substantial effect for the share of pro-European citizens. Spending EU funds increases incumbent mayors' chance of re-election in municipalities with a large share pro-EU citizens and reduces it in municipalities dominated by EU sceptics.
Subjects: 
grants-in-aid
EU
Poland
local elections
instrumental variable regressions
JEL: 
D72
H77
Document Type: 
Working Paper
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