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Fiscal Rules and the Selection of Politicians: Theory and Evidence from Italy
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Fiscal rules, or constraints on the policymaking discretion of elected o cials, are widely used to regulate scal policies. Using data on Italian municipalities, we employ a di erence-in-discontinuity design to provide evidence of the negative e ect of scal rules on mayoral candidates education. Municipalities in which scal rules meaningfully restrict the action space of politicians drive the e ect. These results are consistent with a formal model of scal rules and political selection. We highlight that reducing discretion may a ect the composition of the pool of players: it may alleviate pork-barrel spending but also negatively a ect the education of politicians.
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GAMALERIO, Matteo and TROMBETTA, Federico. Fiscal Rules and the Selection of Politicians: Theory and Evidence from Italy. American Economic Journal: Economic Policy. 2025. Vol. 17, num. 3, pags. 131-164. ISSN 1945-7731. [consulted: 30 of June of 2026]. Available at: https://hdl.handle.net/2445/229774