Economics - General

Do political parties matter?

What happens when your the government is run by those tax-and-spend, dovish, universal health care loving, welfare promoting big government Democrats? Is there a difference when the low tax, hawkish, drug company pawns, anti-equality, small government Republicans take over? Few would question that there are significant ideological differences between the two parties and that federal and state elections have a large impact on the direction this country will take. But do parties matter for local elections?

This is the question analyzed by Ferreira and Gyourko in their 2007 NBER working paper. The authors use a regression discontinuity frame work (à la Lee 2001, Lee 2007) to analyze the outcome of 4,543 elections in 413 cities between 1950 and 2005. The authors find that on the local level, party labels do not affect 1) the size of government, 2) the allocation of spending, or 3) crime rates. This is true despite the fact that the incumbent has a large political advantage.

Why would this be the case. The authors argue that Tiebout sorting can lead to fairly homogeneous preferences among residents. Thus, when mayors run for office, there is less room for idealism. Further, ‘big ticket’ questions such as abortion, national defense spending, and foreign policy are not decided on the local level and these ideological issues–which often dominate federal elections–are not important in national elections. For instance, the Republicans in general may be against allowing illegal immigrants to obtain citizenship, but New York elected two Republican mayors (Guiliani and Bloomberg) who were necessarily ‘pro-immigrant’ due to a constituency made up of many first and second generation immigrants.