Yardstick competition and the political costs of raising taxes: An empirical analysis of Spanish municipalities

By Núria Vergés Bosch, alberT solé-ollé. 2007

131 citations recorded by the source corpus.

We test the ‘yardstick competition’ hypothesis by examining the effects of property tax increases, both in a given municipality and in other neighbouring jurisdictions, on the incumbents’ vote. In order to obtain unbiased estimates of the effects of raising taxes on voting patterns, we take into account national political shocks, the ideological preferences of the citizenship and government traits, and apply Instrumental Variables. The vote equation is estimated using a large database containing nearly 3,000 Spanish municipalities, and we analyse three local election results (1995, 1999 and 2003). Our results suggest that property tax increases, both at the municipal and neighbourhood level, have a non-negligible impact on the incumbent’s share of the vote.

Subfields: Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/c6f4a87cbb760f0495e8a27a09247a14c5056d53

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Political Science and International Relations

Citations in the corpus

Benchmarking across Borders: Electoral Accountability and the Necessity of Comparison (2012, background): “…have found evidence that municipal governments are punished in elections for imposing tax rates higher than that of neighboring municipalities in settings as varied as Flanders (Vermeir and Heyndels 2006), the Netherlands (Allers and Elhorst 2005) and Spain (Bosch and Solé-Ollé 2007). outcomes.”
Strategic interaction in political competition: Evidence from spatial effects across Chinese cities (2016, methodology): “This method allows multiple 5Other studies on tax competition include Besley and Case (1995), Besley and Smart (2007), Bosch and Solé-Ollé (2007), Brueckner and Saavedra (2001), Edwards and Keen (1996), Buettner (2001), Devereux et al. (2007), Hayashi and Boadway (2001), Revelli (2006), and Rork…”