
I am an Assistant Professor (Rtd-T) at the Department of Economics and Finance, Catholic University of Milan.
I am also affiliated with the the Center for Economic Studies and Ifo Institute for Economic Research (CESifo), the Uppsala Centre for Fiscal Studies (UCFS), and the Interuniversity Centre on Local and Regional Finance (CIFREL).
I completed my Ph. D. in Economics at Uppsala University in 2021, and I was a Visiting Fellow at the Department of Economics, Harvard University in 2018/2019.
Publications in peer-reviewed journals
Carozzi, F., Cipullo, D., Repetto, L. (2024). Powers That Be? Political Alignment, Government Formation, and Government Stability. Journal of Public Economics 230, 105017. (WP version; Published version; Online appendix; Replication package)
Abstract
We study how partisan alignment across levels of government affects coalition formation and government stability using a regression discontinuity design and a large dataset of Spanish municipal elections. We document a positive effect of alignment on both government formation and stability. Alignment increases the probability that the most-voted party appoints the mayor and decreases the probability that the government is unseated during the term. Aligned parties also obtain sizeable electoral gains in the next elections. We show that these findings are not the consequence of favoritism in the allocation of transfers towards aligned governments.
Cipullo, D., Reslow, A. (2022). Electoral Cycles in Macroeconomic Forecasts. Journal of Economic Behavior & Organization 202, 307-340. (WP version; Published version)
Media: Dagens Industri – online version here
Abstract
This paper documents the existence of electoral cycles in GDP growth forecasts released by governments. In a theoretical model of political selection, we show that governments release overly optimistic GDP growth forecasts ahead of elections to increase the reelection probability. The bias arises from lack of commitment if voters are rational and from manipulation of voters’ beliefs if they do not expect the incumbent to be biased. Using high-frequency forecaster-level data from the United States, the United Kingdom, and Sweden, we document that governments overestimate short-term real GDP growth by 0.1–0.3 percentage points.
Carozzi, F., Cipullo, D., Repetto, L. (2022). Political Fragmentation and Government Stability. Evidence from Local Governments in Spain. American Economic Journal: Applied Economics 14(2), 23-50. (WP version; Published version; Online appendix; Replication package)
Media: Nadaesgratis.es
Abstract
This paper studies how political fragmentation affects government stability. Using a regression discontinuity design, we show that each additional party with representation in the local parliament increases the probability that the incumbent government is unseated by 5 percentage points. The entry of an additional party affects stability by reducing the probability of a single-party majority and increasing the instability of governments when such a majority is not available. We interpret our results in light of a bargaining model of coalition formation featuring government instability.
Cipullo, D., Le Moglie, M. (2022). To vote, or not to vote? Electoral Campaigns and the Spread of COVID-19. European Journal of Political Economy 72, 102118. (WP version; Published version)
Media: Domani – online version here; Temi di Economia Pubblica SIEP
Abstract
The possibility to run fair electoral campaigns is necessary for the legitimization of modern democracies through elections. Yet, during a pandemic, the risk that electoral campaigns would enhance the spread of the disease is substantive. In this paper, we estimate the causal impact of electoral campaigns on the spread of COVID-19. Exploiting plausibly exogenous variation in the schedule of local elections across Italy, we show that the electoral campaign preceding this latter led to a significant worsening of the epidemiological situation related to the disease. Our results strongly highlight the importance of undertaking stringent measures along the entire electoral process to minimize its epidemiological consequences.
Cipullo, D. (2021). Voting Systems and Fiscal Policy: Evidence from Runoff and Plurality Elections. National Tax Journal 74(2), 347-376. (WP version; Published version; Online appendix)
Abstract
This paper compares policy outcomes under the runoff voting system and the plurality rule by exploiting the assignment of municipalities in Italy to different voting systems based on a population threshold. Mayors, who are the head of the local political power, are elected using a plurality rule in municipalities having fewer than 15,000 residents, while they are elected using a runoff system in municipalities above the threshold. Regression-discontinuity estimates show that municipalities under the runoff system spend 12 percent more than those under the plurality rule and that additional expenditures are not financed via higher taxation.
Working papers
[NEW]Historical Newspaper Markets (with L.V.A. Colombo, M. Magnani, and M.G. Onorato) (Latest version)
Abstract
This paper proposes a novel methodology to identify the geographic market of local newspapers when information on their diffusion is not available or is not sufficiently granular. We illustrate the methodology using historical data from 154 newly digitized newspapers published in Italy between 1919 and 1922. Combining machine learning-augmented optical character recognition techniques, multi-way fixed-effect regressions, and GIS tools, our approach allows us to estimate markets based on news content. Text-based location of newspaper markets considerably improves over assuming that market boundaries coincide with administrative aggregations. We discuss how our technique strengthens the usage of newspapers as a granular and time-varying source of historical information and offers new avenues for identification strategies.
[NEW]Fiscal Policy and Politicians’ Term Length (with F. Franzoni and J. Klarin) (Latest version; CESifo WP)
Abstract
This paper investigates the causal effect of the term length of political executives on economic policy outcomes. To establish causality, we exploit the staggered adoption of four-year terms for governors across US states, using data for the period 1937-2008. We find that increasing governors’ tenure in office from two years to four years reduced state expenditures and revenues by approximately 0.3-0.5 percentage points of GDP. The effect on state finances is primarily driven by a reduction of current spending and grants from the federal government, and it is concentrated in states where the incumbent governor expects fierce competition in the next election. Lastly, we discuss the implications of longer terms for macroeconomic stabilization, political budget cycles, and intergovernmental resource allocation.
[Revised]Biased Forecasts and Voting (with J. Bizzotto and A. Reslow) (Latest version; CESifo WP)
Abstract
We introduce macroeconomic forecasters as political agents who may bias reports
to influence voters. In a probabilistic voting framework, a voter forms expectations
based on a forecaster’s reports. A partisan forecaster faces a trade-off between
protecting its reputation and influencing the vote. The model predicts that the
forecaster may lie before and after the vote. We test the model’s predictions using
high-frequency, forecaster-level data around the Brexit referendum. We find that
forecasters exposed to financial losses from Brexit issued significantly more inaccurate GDP growth forecasts than others. The findings suggest that influential
forecasters may strategically manipulate information when stakes are high.
Inverting the Chain? VAT Collection Regimes and Tax Compliance (with D. Gamannossi Degl’Innocenti, M. Le Moglie, and F. Passerini) (Latest version)
Abstract
The Value-Added Tax (VAT) is widely recognized as being inherently self-enforcing because it features third-party reporting and spread withholding along the production chain. However, a growing literature documents significant VAT tax gaps, sparking interest in possible improvements to VAT design. Reverse Charge (RC) is among the main examples: recently adopted by multiple countries to a variety of industries, RC shifts the entire tax payment on retailers, which, however, remain subject to third-party reporting. Leveraging administrative firm-level data from Italy and a quasi-experimental variation, we show that RC leads to an increase of reported value added (+20 percent). The effect of RC is present across the distribution of firm size although it is stronger among small firms and companies that used to bunch around the zero-liability tax kink. On these firms, RC limits the incentive to under-report sales. On the other end of the distribution of firm size, we document that RC increased reported value-added by limiting over-reporting of purchases.
[Revised]Legislative Effectiveness, Trade Schocks, and Electoral Accountability (with B. E. Lee) (Latest version; CESifo WP)
Abstract
Successful economies rely upon effective lawmaking. Representatives must be
effective legislators—able to craft and pass new laws—and voters must choose to
(re)elect these effective legislators, particularly when circumstances demand new laws.
We analyze election outcomes from the U.S. House of Representatives, legislators’
legislative effectiveness scores, and exogenous increases in import competition from
China between 2002 and 2010. We document that trade shock exposure significantly
reduces the probability of reelection of incumbents who have a record of being (relatively) ineffective legislators. On the contrary, for incumbents with a record of being
effective legislators, the adverse effects of trade shock exposure largely nullified; for
very effective legislators, trade shock exposure even improves their electoral fortunes.
We provide evidence that this result is driven by trade shock exposure increasing voters’ demand for policy change and, in turn, their support for more effective legislators.
Our results have consequences for the effectiveness of future cohorts of legislators.
Gender Gaps in Political Careers: Evidence from Competitive Elections (Latest version; CESifo WP)
Abstract
This paper documents large and long-lasting gender differences in the career returns from participating in an election. Among candidates who marginally win their primary for a seat in the US House of Representatives, women are 20 percent less likely than men to win the seat. Using a difference-in-discontinuities design, I then show that the gender gap in the probability of being elected translates into diverging future career outcomes. Women are substantially less likely than men to win future elections and to climb the political hierarchy. Similar results are obtained in the context of runoff mayoral elections in Italy.
[NEW]Strategic bankruptcies. Do Smart Politicians Do It Better? (with M. Bordignon and G. Turati) (Latest version; CESifo WP; CIFREL WP)
Abstract
We study the reaction of low vs. high-skilled politicians to a reform, approved in Italy in 2011, that introduces stringent individual financial and career sanctions to local administrators who are judged responsible for their municipality’s bankruptcy. To this aim, we leverage exogenous variation induced by close elections between a mayoral candidate who holds a college degree and a mayoral candidate who does not. After the introduction of sanctions, skilled politicians tend to declare bankruptcy with a higher probability than low-skilled politicians. The effect is concentrated in municipalities in which the financial state of distress was not advocating for a bankruptcy. Our findings document that individual sanctions against politicians may backfire if strategic considerations are not taken into account properly.
[Revised]When Women Take All: Direct Election and Female Leadership (Latest version; CESifo WP)
Awards: SIEP Prize 2022; IIPF Young Economist Honorable Mention 2022
Media: Genderlab.unibocconi.it
Abstract
This paper investigates how direct election regimes (à la presidential democracy) affect the selection of women into political offices compared to indirect appointment (à la parliamentary). Exploiting the staggered phase-in across Italian municipalities of a reform to the local institutional regime, I find that the introduction of direct elections increased the fraction of female mayors substantially. The results are stronger in cities with a high pre-reform share of female politicians and driven by high-quality female officials replacing undereducated incumbents. Taken together, the results of this paper inform that direct election regimes ease the selection of competent politicians into office.