Single Ballot versus Double Ballot and party coalitions: the impact on fiscal policy. Evidence from Italy

The aim of this paper is to use data for all Italian municipalities, from 2001-2006, to empirically test the extent to which two electoral rules, which hold, for small and large municipalities, affect fiscal policy decisions. Municipalities with fewer than 15,000 inhabitants elect their mayors in accordance with a single ballot plurality rule, whereby only one list can support a given candidate; municipalities with more than 15,000 inhabitants elect their mayors in accordance with a run-off plurality rule, with no restrictions on the number of lists that can support a given mayoral candidate. We find evidence to suggest that, owing to different electoral rules, per capita total taxes and charges in large municipalities are lower than in small ones. The same is true of current expenditure, albeit to a lesser extent than is the case with total taxes and charges. However, if the mayor of a large municipality has been elected by a broad coalition, he/she behaves similarly to the mayor of a small municipality