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.
Does Size Matter? Evidence from Municipality Break-ups
CESifo Working Paper No. 9042, CESifo, Munich, 2021
Municipal break-ups are an understudied phenomenon despite the fact that such territorial reforms regularly take place across the globe. This paper estimates how seven voluntary splits of Swedish municipalities affected municipal current costs. To predict what would have happened had the break-ups not taken place, we apply the matrix completion method with nuclear norm minimization. Our results do not support the standard view, that smaller municipalities imply higher per capita costs. Instead, we find an intriguing heterogeneity: costs increase in some municipalities, are unaffected in others and decrease elsewhere. The findings point to the complex nature of territorial reforms, the difficulty in drawing general conclusions of such, and hence, the perils of expecting them to have uniform outcomes.
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.