Rules, discretion and quality of government : evidence from Italian municipalities

• Main Author: Gamalerio, Matteo
• Published: University of Warwick 2017
• Subjects: 330; HC Economic History and Conditions
• Online Access: https://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.731338

In recent years many countries have introduced fiscal rules with the purpose of reducing the incentives for local governments to accumulate public debt and run deficits. Despite wide adoption, there is not enough evidence about the consequences of fiscal rules for the quality of the political process. In this PhD dissertation, exploiting panel data on Italian municipalities and an institutional framework which mandates the application of fiscal rules only for municipalities above 5000 inhabitants, I study how fiscal rules affect the quality of the political process. In particular, in Chapter 1, using a Difference-in-Discontinuity (Diff-in-Disc) design, I study how fiscal rules affect the quality of the political class, and in particular the level of education of politicians. In Chapter 2, using Regression Discontinuity Design and Propensity-Score Matching, I study whether politicians characterized by different levels of education make different choices in terms of fiscal policies and whether they have different political career goals. Finally, in Chapter 3, I study how political parties can discipline politicians by affecting their career concerns. In particular, using Regression Discontinuity Design, I show that national parties can act as a substitute for fiscal rules in constraining politicians.