2015/04/08 by Yaniv Reingewertz · 1 citation
Economics, Econometrics and Finance · Social Sciences · #Electoral Systems and Political Participation #Fiscal Policies and Political Economy #Local Government Finance and Decentralization
paper · doi:10.1080/03003930.2015.1028625
crossref issued 2015/04/08 · crossref published 2015/04/08 · crossref published-online 2015/04/08 · openalex publication_date 2015/04/08 · crossref created 2015/04/08 · crossref published-print 2015/09/03 · crossref deposited 2017/06/23 · openalex created_date 2025/10/10 · crossref indexed 2026/07/28 · openalex updated_date 2026/07/28
This article analyses the link between fiscal balance and political fragmentation. While a large body of literature states that political fragmentation leads to fiscal deficits, others suggest that political fragmentation is associated with political competition, which tends to improve fiscal balance. These hypotheses are tested using budgetary and political data of municipalities in Israel for the years 1998–2006. The results suggest that both hypotheses may be correct, depending on voting behaviour. In Arab municipalities, where residents vote according to clan affiliation, low levels of political fragmentation are associated with large debts. On the contrary, in Jewish municipalities, low levels of political fragmentation are associated with small debts, since in these cases, coalition formation requires less spending and is easier to sustain.