Research

This paper asks whether the fiscal effects of political-body size depend on which branch of local government expands. I study this question in Italian municipalities, where the mayor governs with the support of an executive board and a municipal council, and where the sizes of these bodies are shaped by statutory rules tied to population thresholds and electoral schedules. Exploiting this institutional variation, I estimate the separate fiscal effects of executive-board size and council size within a common setting. Larger executive boards are associated with higher expenditures and revenues, with the strongest effects concentrated in investment spending and capital transfers. By contrast, larger councils are associated with lower expenditures and revenues and with a less capital-oriented budget mix. Mechanism evidence points to greater specialization within larger executive boards and to a more cautious approval environment in larger councils, reflected in lower planned investment and a shift away from capital spending and capital-transfer financing. Overall, the fiscal effects of political-body size depend on which body expands.

Municipal bankruptcy can affect nearby governments when fiscal liabilities remain local. Using Italian municipal bankruptcy events, fiscal data, budget plans, and a municipal adjacency network for 2001--2015, I study whether nearby bankruptcy generates fiscal contagion or precautionary adjustment. Direct exposure to a bankrupt neighbour reduces current expenditure by about 2 percent, concentrated in flexible non-payroll spending and visible in subsequent budget plans. The response is strongest where fiscal vulnerability and budget flexibility are greatest, and is unrelated to electoral incentives, though a fainter second-ring signal registers more for mayors with professional occupations or regional alignment. Exposed municipalities are no more likely to enter bankruptcy, and flow-based fiscal health does not deteriorate, but direct neighbours' debt stock and debt-to-revenue ratio rise temporarily, mostly unexplained by new borrowing, consistent with previously off-balance-sheet obligations surfacing. Municipal bankruptcy generates local expenditure discipline alongside a more complex balance-sheet response than pure contagion or pure discipline.

Election-year fiscal cycles in centralized systems may operate not only through annual spending totals but also through the timing of budget execution. When annual appropriations are relatively constrained but the scheduling of already-authorized payments remains flexible, incumbents may respond to electoral incentives by advancing the implementation of discretionary expenditures. We study this margin using data on all Turkish provinces from 2007 to 2024, linking annual local-government outturns to quarterly expenditure flows. Our central empirical tests focus on province-level Q1 execution shares. Because local elections are held in March, the first quarter contains the immediate pre-election window. In election years, provinces execute a substantially larger share of annual capital and procurement spending in Q1, while more rigid categories such as employees' compensation exhibit little change. Annual regressions yield point estimates consistent with higher-spending election years after controlling for province fixed effects and province-specific trends, although inference weakens under province and year clustering. Descriptive quarterly profiles around the four national elections show post-election declines in flexible spending categories, reinforcing the timing interpretation. Taken together, the evidence suggests that election-year fiscal cycles operate along three margins: higher annual spending, shifts toward flexible categories, and earlier within-year execution. The results highlight how, in centralized fiscal systems, political incentives can shape not only how much governments spend, but also when authorized spending is implemented.

Over one billion people worldwide live in rural areas without access to electricity. In developing countries, while governments use electrification programs to stimulate non-agricultural employment, they may also have benefits for the agricultural sector. We estimate the impacts of India's large-scale rural electrification program on agricultural output using a difference-in-difference design and a combination of administrative and satellite data. We find that electrification leads to a 1.7% increase in agricultural output which is largely driven by the rain-fed summer cropping season. Agriculture in electrified villages becomes less sensitive to rainfall shocks, which is of growing importance given worsening environmental conditions. We provide suggestive evidence that this decline in sensitivity is due to an increase in the uptake of electric shallow tube wells, particularly at the intensive margin.