Partisan influence on local public policy : an empirical test of Portuguese Municipalities

This paper compares two models to explain the effects of party politics on Portuguese local government expenditures. The demand model (in this case the mean voter) fails empirically in the fact that public expenditures are not responsive to the tax share price supported by the mean voter. This model assumes that party competition is implicitly reflected in the fact that parties must satisfy the preferences of public expenditures of the aggregate voters. If the model fails, so does the idea that policy is just a means to win elections and be in power. The second model explicitly tests party effects and is adjusted to the specific features of the Portuguese local government structure, mainly its financial constraints on central grants and taxation. Controlling for the needs and resources, the model supports a slight effect of a right-leaning ideology and a sympathetic central government (affinity between ruling party in local and the party central government)