Bring Out the Steamrollers, it's Election-Year Again!
FinanzArchiv / Public Finance Analysis (76), 2020:1, pp. 29-56
In this paper I test for the presence of election-cycles within the budget composition in Swedish municipalities. I find that local governments increase expenditures that are visible to voters in election years. Other expenditures do not decrease and as a consequence total spending increases. Budget balance is achieved by an increase in intergovernmental grants. I also find suggestive evidence that municipalities with the same political affiliation as the ruling central government receive more grants and spend more on visible expenditures.
Term Length and Public Finances: The Case of U.S. Governors
Department of Economics Working Paper, 2019:5, Uppsala University.
This paper studies how the term length for politicians affect public finances. I test whether the gradual increase from two- to four-year terms for American governors affect state finances using a rich state-year panel stretching back almost a century. The results show that adopting four-year terms decreases yearly expenditures and revenues by 6 %. The effect of the reform is present immediately after voters approve the ballot measure, when the last two-year term governor is still in office, which suggests that the mechanism is stronger re-election incentives for the incumbent. The effect is larger among electorally ’at risk’ governors. Democratic governors respond to longer terms by increasing public employment instead of decreasing expenditures.
Work in progress
Municipal mergers are often motivated by the desire to create larger municipalities and thereby draw advantages of economics of scale. Empirical evidence, however, show municipal mergers lead to decreased administrative costs, but that total per capita costs remain unchanged. In this paper, we instead investigate how municipal break-ups affects total municipal costs and administrative costs. As opposed to municipal mergers, that often initiated, or even forced, from above, municipal break-ups are typically voluntary from the municipalities’ perspective. We analyze 12 voluntary break-ups of Swedish municipalities from the late 1970s until early 2000s. To estimate causal effects we use the traditional difference-in-differences method and the standard synthetic control group method, as well as more recent methods making use of machine learning techniques, such as the elastic net approach and the matrix completion method with nuclear norm minimization.