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Running for office again: evidence from Portuguese municipal elections

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Abstract

Using a data set that covers all Portuguese mainland municipalities for the period 1979–2005, this study performs an empirical analysis of the economic determinants of mayors’ decisions to run for another term in office. The literature on the subject is mainly centered on the United States and, as far as we know, there are no papers addressing the economic factors influencing those choices.

Probit panel estimations show that local economic conditions matter more than the national or regional economic environment. The results also confirm that political variables are important and that they influence the likelihood of seeking reelection in much the same way as they affect vote and popularity functions.

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Notes

  1. See, for example, Black (1972) and Fox and Lawless (2005).

  2. In 2005, the Portuguese parliament issued a law limiting the number of terms to three. However, it will have a material impact only in the 2013 local elections as the count started, for all mayors, in the 2005 elections.

  3. Social background, political attitudes, and memberships in elite groups are also studied by researchers as potential determinants of political recruitment (see, for instance, Jacob 1962).

  4. Levine and Hyde’s candidacy model differs from traditional theories of participation because it assumes that incumbents can affect the expected payoff with respect to each act of participation.

  5. See, for example, the seminal work of Frey and Schneider (1978) for the United States and Lanoue and Headrick (1994) for Great Britain.

  6. Veiga and Veiga (2004, 2010) also report the existence of costs of ruling for Portuguese governments.

  7. Election years were: 1979, 1982, 1985, 1989, 1993, 1997, 2001, and 2005.

  8. Freguesias are the lowest administrative unit in Portugal. The president and council members are elected directly by the voters living in the area. Each municipality is comprised of a variable number of freguesias.

  9. The D’Hondt method is a highest averages method for allocating seats in party-list proportional representation. The total votes cast for each party in the electoral district is divided, first by 1, then by 2, then 3, right up to the total number of seats (n) to be allocated for the district/constituency. From all parties and all divisions of votes the n highest ones are select. Each selected value is linked to a specific party thus allocating the n available seats.

  10. Law 159/99 of the Portuguese Republic defines the areas of intervention of Portuguese local governments.

  11. NUTS is a geocode standard for referencing the subdivisions of countries for statistical purposes, used within the European Union. In Portugal, a hierarchy of three NUTS levels is established. Continental Portugal corresponds to a NUTS I region, which is subdivided into five NUTS II regions. These five regions are then subdivided into 28 sub-regions (NUTS III), each one comprising several municipalities.

  12. See Paldam (2004) for a survey of vote studies.

  13. This is a yearly mandatory employment survey that covers almost all privately owned firms employing paid labor in Portugal (public servants and own employment are not included).

  14. Other studies find similar results for other countries. See, for instance, Galli and Rossi (2002) for Germany and Sakurai (2011) for Brazil.

  15. Data on municipal accounts and populations were obtained from the local authority’s (Direcção Geral das Autarquias Locais—DGAL) annual publication called Finanças Municipais (Municipal Finances).

  16. The data for the dependent variable (Recand) were also obtained from this source.

  17. Another variable that can be employed to test for past electoral support is the percentage of votes obtained by the mayor in the previous election (PVotGov). This will be used later in a robustness analysis.

  18. For details on this binary choice model see, for example, Greene (2008:Chap. 23).

  19. The results of those tests are available upon request. We should also notice that as probit models do not render themselves well to the fixed effects treatment, due to the incidental parameter problem (Wooldridge 2002:Chap. 15, 484), a fixed effects logit was estimated instead.

  20. In this study, we test national, regional and local economic conditions, because, as mentioned in Sect. 2, results found in the voting literature are mixed regarding their importance.

  21. See Veiga and Veiga (2010) for a similar approach on the study of the impact of local and national economic conditions on legislative election results.

  22. Our explanation depends on the assumption that governmental popularity has a general negative trend during mandates. This variable would work better if interacted with a direct measure of the national government’s popularity. However, we found no official source from which to get a consistent and organized full time series on national governments’ popularity until 2005.

  23. Although the existence of costs of ruling can decrease the mayors’ chances of winning the next election, the negative effect found may be due to the fact that we only find a small number of mayors with many terms in office. The descriptive statistics presented in Table 2 for Recand by TLGov indeed confirm the decline in the number of mayors with multiple terms in office, but showing that the mean remains around 0.8 in most of the cases.

  24. We also tested for nonlinear effects in the national regressions (results are not reported here), but the square of this variable was never statistically significant and its inclusion even greatly reduced the significance of TLGov. In that case, the effects are simply linear. Hence, we prefer to exclude TLGov_sq from the national estimations.

  25. Due to potential problems of endogeneity related to the municipal budgetary variables, we provide below some robustness checks that deal with this issue.

  26. We also tested the hypothesis of a nonlinear relationship between the dependent variable and Age but found no empirical support for this specification. Moreover, the correlation between Age and TLGov is only 0.18.

  27. Those results are available upon request.

  28. Additional estimates with a univariate probit model for Reelect have also provided similar results to the ones obtained with the bivariate probit. Those results are not presented here but they are available upon request.

  29. We should stress that as our interest is essentially to understand the reasons why mayors run for office again—and as the results for Recand in the bivariate probit are always quite similar to the ones obtained in the univariate probit—we opted by presenting, in the robustness analysis, the results from the estimation of this last model to save space. Nevertheless, some bivariate probit regressions are also reported (see Table 6). More results are available upon request.

  30. The results did not change even when the difference in the percentage of votes between the winner and the second party was used instead of PVotGov. Those results are not reported here, but are available upon request.

  31. The first lag of expenditures is not considered to be a valid instrument because it may also be endogenous: the expenditures items tend to increase in the year before elections (see Veiga and Veiga 2007a, 2007b). Moreover, the Amemiya-Lee-Newey test for overidentification confirms that the chosen instruments are orthogonal to the error term (i.e., the overidentification restrictions are valid) and the Kleibergen-Paap test for weak instruments shows that the instruments are highly correlated with the potentially endogenous regressors (TotExpd and CapExpd): for one endogenous regressor and two instrumental variables, the Kleibergen-Paap F-statistic always exceeds the Stock and Yogo (2005) 10% maximal IV critical value of 19.93 (considering a 5% significance level).

  32. Those results are not presented here but are available upon request.

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Acknowledgements

The authors wish to thank Pedro Cerqueira, Mario Mechtel, the Editor, two anonymous referees, the participants at the 2011 Meeting of the European Public Choice Society, University of Rennes, France, 28 April–1 May 2011, and the participants at the 5th Annual Meeting of the Portuguese Economic Journal, University of Aveiro, Portugal, 8–9 July 2011 for their most helpful comments and suggestions. The authors also thank the financial support provided by the Portuguese Foundation for Science and Technology under research grant PEst-C/EGE/UI3182/2011 (partially funded by COMPTE, QREN and FEDER).

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  1. Faculty of Economics, University of Coimbra and NIPE, Avenida Dias da Silva 165, 3004-512, Coimbra, Portugal

    Vítor Castro

  2. Faculty of Economics, University of Coimbra and GEMF, Avenida Dias da Silva 165, 3004-512, Coimbra, Portugal

    Rodrigo Martins

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Correspondence to Vítor Castro.

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Castro, V., Martins, R. Running for office again: evidence from Portuguese municipal elections. Public Choice 156, 677–702 (2013). https://doi.org/10.1007/s11127-012-9922-3

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