“Voting Systems and Fiscal Policy: Evidence from Runoff and Plurality Elections”

National Tax Journal 74(2), 347 – 376

Links: Full text; 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 less 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.