Can Citizens Set City Policy? Evidence from a Decentralized Welfare State

Abstract

Municipal governments supposedly empower citizens, giving them the ability to shape the political organization of their local community. In spite of this, we know little about whether municipal governments are in fact responsive to the policy views of municipal electorates. In this study, we look at whether the policy implemented by local politicians actually respond to changes in the ideological mood of the electorate. In particular, we compile a unique and comprehensive data set of local fiscal policy in Denmark, which we use to construct municipal-level estimates of fiscal policy conservatism. These detailed policy data are then linked to an indicator of local ideological sentiment. Based on these data, we find strong evidence for dynamic responsiveness: When local preferences change, local public policy responds.

How Strong is Local Politics’ Grip on Local Economic Development? The Case of Swiss Small and Medium-Sized Towns

“…Research on decentralized countries shows that local parties can matter for local revenue policies such as local income and property taxes and local public spending ( Einstein and Kogan 2015 ; Kübler and Rochat 2018 ; Egerod and Larsen 2021 ). This is also true in Switzerland where tax rates and the economic freedom of local enterprises are two of elected local officials’ main self-reported issues ( Geser et al 2011 ; Geser and Meuli 2011 ).…”

From preferences to policy

“…No effect is found on spending for local public goods. Egerod and Larsen (2021) Denmark Linear regression based on difference-indifferences…”