Electoral Incentives to Obtain EU Grants

Political agency models predict that electoral concerns induce politicians to put effort into making policies that benefit citizens. We exploit the introduction of mayoral term limits in Portugal to investigate how electoral incentives affect incumbents’ efforts to obtain EU grants. We focus on EU grants because getting them requires effort. Moreover, by obtaining EU grants, mayors can do more for their citizens. We focus on Portugal because it provides a quasi-natural experimental setting to determine the causal effect of electoral incentives on effort. We find that term-limited mayors receive about 30% less EU money than mayors eligible for re-election

Economic Policies and Impacts · Fiscal Policies and Political Economy · Local Government Finance and Decentralization