Fiscal Rules, Corruption, and Electoral Accountability
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Date
2025-07
Publication Type
Journal Article
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no
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Abstract
As corruption mostly takes place through the misuse of public spending, it is crucial to understand how policies limitingthe spending capacity of local governments may affect corruption. We study the extension of fiscal rules to small Italianmunicipalities. First, we find a decrease in both corruption charges and corruption charges per euro spent. This effectemerges only in areas in which fiscal rules put a binding cap on municipal capital expenditures. Second, the reduction incorruption is linked to accountability incentives, as it emerges mostly in preelectoral years and for reeligible mayors. Third,we do not find any meaningful impact on local public goods or living standards. Overall, our findings suggest that fiscal rulestogether with electoral incentives might reduce rent-seeking through lower public spending without depressing local welfare.
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Publication status
published
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Book title
Journal / series
Volume
87 (3)
Pages / Article No.
857 - 871
Publisher
University of Chicago Press
Event
Edition / version
Methods
Software
Geographic location
Date collected
Date created
Subject
Corruption; Accountability; Fiscal Rules; Rent Seeking; Local Politics
Organisational unit
03988 - Köthenbürger, Marko / Köthenbürger, Marko