Incumbent tenure and municipal governance: the Portuguese case

Abstract

The present study analyses Portuguese municipalities’ data in order to understand how the incumbent tenure influences economic performance at a municipal level. The incumbents’ age is used as an instrumental variable to the mayors’ tenure and its effect on the local economic development and pre-electoral fiscal policy is measured through a Two-stage Least Squares estimation with random effects. Tenure proves to have an insignificant positive impact on all economic and fiscal variables analysed and specific time-effects preponderance is outlined.