Wednesday, August 13, 2008

do political parties matter?

Does it matter if we elect a democrat or a republican to local office? If we elect a republican, will government be smaller? Do democrats allocate the budget differently than republicans? Which party is better at fighting crime? These are the questions asked in a careful analysis by Fernando Ferreira and Joseph Gyourko (both at the Wharton School). Their surprising result: the political party doesn't matter.

This result is in contrast to state and national politics, where the party matters. How to explain this difference? The authors suggest that it comes from the relative homogeneity of cities, which "appears to provide the proper incentives for local politicians to be able to credibly commit to moderation and discourages strategic extremism."

The paper will appear in an upcoming issue of the QJE. Download it here (or here).

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