The theater of democracy

: an empirical test of public spending visibility in Italian local politics

Abstract

This dissertation explores whether Italian mayors in small municipalities adjust the composition of public spending for electoral purposes. Do incumbents shift resources toward visible categories, such as investment projects, in the years preceding elections? And how did the 2014 Delrio reform, which extended the number of mayoral terms below the 3,000-inhabitant threshold, affect this pattern? To address these questions, I assembled a novel dataset of 150 municipalities for the period 2010–2019, merging budgetary, electoral, and census data. Exploiting the discontinuity created by the Delrio reform, I implement difference-in-differences and event-study designs to isolate the dynamics of visible spending before and after elections. The results indicate no robust evidence of pre-electoral manipulation: investment does not increase systematically, and in some cases it falls after elections. These findings align with rational inattention theory, suggesting that the visibility of spending is not sufficient to trigger systematic political budget cycles when voters face high costs of acquiring information. Also, empirical evidence suggests that other signals, such as tax reductions, may in some cases be better instruments to manipulate an electoral outcome.

Date of Award	14 Oct 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Joana Silva (Supervisor)