Don't blame me! Politicians' accountability and electoral response when powers are shared

Abstract

This paper examines if politicians react to events they cannot control to avoid political blame and if voters hold politicians accountable for functions beyond their office. I focus on the response of mayors and voters to a farmland tax implemented by the Italian central government. I investigate how the municipalities affected by the new policy adjust to it and study if the election odds of the incumbent mayor's party in towns subject to the tax are affected. Mayors increase spending in municipalities where the tax is implemented. Average spending grows by 1.38 euro (about a 1% increase) and it is financed by increased borrowing which expands by 0.64 euro per capita, on average. Voters do not seem to punish the local incumbent for a policy decided by the national government. Two factors may have contributed to offsetting the electoral impact. The first is greater spending in those municipalities where the incumbent is on the ballot. The second is a media account of the policy which was factual and not biased against the local incumbent. Overall, these findings suggest politicians react to policies that are fully out of their hands, potentially to avoid electoral punishment.