Lame ducks and local fiscal policy quasi-experimental evidence from Portugal Mariana Lopes da Fonseca
By: Fonseca, Mariana Lopes da
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Material type: 
ArticlePublisher: 2020Subject(s): POLITICA FISCAL | POLITICOS | PORTUGAL
In:
The Economic Journal vol. 130. nº 626, february 2020, p. 511-533Summary: 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.
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| OP 282/2019/624-1 Can taxes tame the banks? | OP 282/2020/626 The Economic Journal | OP 282/2020/626-1 Taxation of temporary jobs | OP 282/2020/626-2 Lame ducks and local fiscal policy | OP 282/2020/627 The Economic Journal | OP 282/2020/627-1 Fiscal policy with limited | OP 282/2020/628 The Economic Journal |
Bibliografía
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.
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