POLITICAL COMPETITION AND POLITICIAN QUALITY: EVIDENCE FROM ITALIAN MUNICIPALITIES

Abstract: In this paper, using data from Italian local level governments for the years 1985-2008, we investigate whether political competition affects the quality of elected politicians, as measured by using some ex-ante characteristics such as educational level and type of job held. We handle endogeneity problems through an instrumental variable approach using a variable which takes into account whether the previous legislature survived until the end of its legislative term as an instrument for political competition. Early termination increases political competition, without directly affecting the quality of candidates. Two Stage Least Square estimates support the assumption that political competition positively affects politician quality. Results are robust to different measures of political competition and to different specifications of the model