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Single‐Party Rule, Public Spending, and Political Rents: Evidence from Finnish Municipalities *
Author(s) -
Meriläinen Jaakko
Publication year - 2019
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/sjoe.12288
Subject(s) - economic rent , regression discontinuity design , economics , politics , public economics , rent seeking , public spending , microeconomics , political science , law , medicine , pathology
In this paper, I investigate the differences in public spending and extraction of political rents between single‐party and coalition governments. Common pool theories predict that coalitions tend to spend more and extract more rents than single‐party governments. Using data from Finnish municipalities for the years 1997–2012 and a regression discontinuity design approach tailored for proportional elections, I provide causal evidence consistent with the theoretical predictions.