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Ideology and Public Policies: A Quasi-Experimental Test of the Hypothesis that Left-Wing Governments Spend More

Author

Listed:
  • Benoît LE MAUX

    (University of Rennes 1, CREM-CNRS, Condorcet Center for Political Economy, France)

  • Kristýna DOSTÁLOVÁ

    (University of Rennes 1, CREM-CNRS, France)

  • Fabio PADOVANO

    (University of Rennes 1, CREM-CNRS, Condorcet Center for Political Economy, France)

Abstract

In the literature it is often argued that governments on the left tend to raise tax rates and public spending more than their right-wing counterparts. We demonstrate that this result must be interpreted with caution. Not only it may reveal partisan effects, due to the direct impact of parties’ ideology on public spending, but also a selection bias, since the distribution of voters’ preferences determines the ideology of the government in office. The present research overcomes this problem of observational equivalence by applying two identification strategies, namely re-gression discontinuity design and propensity score matching. Using data from the French local public sector, we show that governments facing the same economic situation do not spend more when they are left-wing, particularly in the case of social expenditures. This result rules out the partisan-politicians hypothesis and lends support to demand driven policy selection processes.

Suggested Citation

  • Benoît LE MAUX & Kristýna DOSTÁLOVÁ & Fabio PADOVANO, 2017. "Ideology and Public Policies: A Quasi-Experimental Test of the Hypothesis that Left-Wing Governments Spend More," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2017-01-ccr, Condorcet Center for political Economy.
    • Handle: RePEc:tut:cccrwp:2017-01-ccr
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    Cited by:

    1. Benoît Maux, 2018. "On the Necessary and Sufficient Condition for Increasing Direct Participation Rights in Democracies: Comment on “Proposals for a Democracy of the Future” by Bruno S. Frey," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 35(1), pages 101-109, June.
    2. Benoît LE MAUX & Kristýna DOSTÁLOVÁ & Antti MOISIO, 2017. "Do political parties matter? Endogenous fragmentation, partisanship, and local public expenditures in Finland," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2017-02-ccr, Condorcet Center for political Economy.

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    More about this item

    Keywords

    Public services; Party ideology; Redistribution; Partisan effects; Selection bias;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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