Abstract

In this note we applied the Rogoff's (1990) model of political budget cycle to analyse whether the timing of the elections can be influential in shaping the economic policy of Italian municipalities. Specifically, we studied the relationship between local fiscal policy and the timing of national election dates. We found the existence of a political budget cycle but, in contrast to Rogoff (1990), the cycle is highly characterised by a rise in government investment spending rather than in local public expenditure in goods and services. These results have been explained in the light of the role played by Italian local policymakers acting inside a local party system isomorphous to the national party system and facing an electoral campaign aiming at satisfying more the preferences of large groups of voters than those of individuals electors.