Template-Type: ReDIF-Paper 1.0
Author-Name: Massimo Bordignon 
Author-X-Name-First: Massimo
Author-X-Name-Last: Bordignon
Author-Email: massimo.bordignon@unicatt.it
Author-Workplace-Name: Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore
Author-Name: Matteo Gamalerio 
Author-X-Name-First: Matteo
Author-X-Name-Last: Gamalerio
Author-Email: matteo.gamalerio@gmail.com
Author-Workplace-Name: University of Warwick
Author-Name: Gilberto Turati
Author-X-Name-First: Gilberto
Author-X-Name-Last: Turati
Author-Email: gilberto.turati@unito.it
Author-Workplace-Name: Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche, Università di Torino
Title: Decentralization, Vertical Fiscal Imbalance, and Political Selection
Abstract: In a career-concern model of politics with endogenous candidacy and different types of politicians, following a decentralization reform, politicians with different skills are elected in municipalities characterized by different levels of autonomous resources. As an effect, consumer welfare increases only, or mainly, in richer municipalities. We test these predictions by exploiting the differentiated reduction in Vertical Fiscal Imbalance in Italian municipalities, due to the strong difference in the tax base, following the decentralization reforms of the '90s. Results strongly support our predictions and are robust to several alternative stories.
Length: 49
Creation-Date: 2013-11
File-URL: http://dipartimenti.unicatt.it/economia-finanza-def0002.pdf
File-Format: Application/pdf
File-Function: First version, 2013
Number: def0002
Classification-JEL: D72 D78
Keywords: decentralization, vertical fiscal imbalance, quality of politicians
Handle: RePEc:ctc:serie1:def0002