Voter information and electoral outcomes: the Norwegian list of shame
- 507 Downloads
This paper studies the effect on vote shares and reelection probability for the incumbent’s party from a signal indicating poor fiscal performance. In Norway, local governments with persistent deficits are placed in the Register for State Review and Approval of Financial Obligations (Robek). In addition to increased central government monitoring, placement in Robek triggers a great deal of attention in the local media. It is thus expected to raise voter awareness of the fiscal stance of the local government. The results indicate that voters value the information embedded in this signal, and take it into account when casting their votes. Both the share of votes for the incumbent’s party and the probability that the incumbent party stays in office is significantly reduced as a consequence of the local government being included in the register. The vote share for the incumbent is reduced by about three percentage points, while the reelection probability is reduced by about 0.12.
KeywordsLocal government Decentralization Fiscal discipline Transparency
JEL ClassificationD72 H72 H77
Valuable comments and suggestions from Lars-Erik Borge, Kåre Johansen, Jarle Møen, Jørn Rattsø, Guttorm Schjelderup, William Shughart (Editor in Chief), Georg Vanberg (associate editor), and three anonymous referees are much appreciated. I am grateful to the Norwegian Ministry of Local Government and Regional Development for providing me data on entries to and exits from Robek, in particular Evy Tynes Johnsen. Some of the data are obtained from the Norwegian Social Science Data Services. All errors are my own.
- Borge, L.-E., & Hopland, A. O. (2012). Maintenance and building conditions in Norwegian local governments: Economic and political determinants. Working Paper No. 8/2012. Department of Economics, Norwegian University of Science and Technology.Google Scholar
- Borge, L.-E., & Rattsø, J. (2002). Local government budgeting and borrowing: Norway. In B. Dafflon (Ed.), Local public finance in Europe. Cheltenham: Edward Elgar Publishing Limited.Google Scholar
- Hopland, A. O. (2013b). One size fits all? Facility management in Norwegian local governments. Nordic Journal of Surveying and Real Estate Research (forthcoming).Google Scholar
- Pettersson-Lidbom, P. (2010). Dynamic commitment and the soft budget constraint: An empirical test. American Economic Journal: Economic Policy, 2, 154–179.Google Scholar
- Rogoff, K. (1990). Equilibrium political budget cycles. American Economic Review, 80, 21–36.Google Scholar