Essays on Political Representation, Electoral Accountability and Strategic Interactions

Sammanfattning: This thesis consists of an introduction and four self-contained essays.Essay 1 (with Matz Dahlberg and Eva Mörk) investigates political representation by exploring the relationship between citizens' preferences and the preferences of their elected representatives. Using Swedish survey data, the empirical analysis shows that voters and politicians have significantly different preferences for local welfare services, implying that voters do not elect representatives with the same preferences as their own. The results show that when comparing a politician of a certain age, gender, educational level and marital status, with a voter with identical characteristics, the politician still has preferences for a significantly higher level of spending on the locally provided services. Hence, our results indicate that the representation of different socio-economic groups does not necessarily lead to a larger degree of representation of these groups' agendas. Moreover, we find the observed difference to be largest for the least salient expenditure item. We do, however, not find any evidence for differences in preferences between the two groups being associated with a decline in trust for politicians among voters.Essay 2 examines the role of politicians' and voters' preferences in determining policy choices. The paper uses survey data to construct observable measures of actual policy preferences of both voters and their elected representatives, for local public services. The empirical analysis suggests the preferences of politicians and voters to have a significant impact on spending patterns during the election period. The impact of preferences depends on the spending category. The results show voters' preferences not to be expressed by politicians for the least salient issue, whereas for the most salient category, schooling, the growth in spending is determined by the preferred level of the electorate. The results suggest that the electoral cost of not implementing the policy choice of voters at large, is higher for the more salient public service.Essay 3 (with Karin Edmark) tests for strategic interaction in tax setting using panel data on Swedish local governments. Due to the existence of competing theoretical models, we make no a priori assumptions regarding the underlying behaviour of individuals, but instead test for the presence and type of underlying spatial process. The paper uses a number of additional, indirect predictions from the theories of tax and yardstick competition to test for the presence of strategic interaction. The analysis provides strong evidence of spatial dependence in tax rates among Swedish local governments. Moreover, we find evidence of both tax competition and yardstick competition effects in the setting of tax rates.Essay 4 investigates the idea that voters hold their local politicians accountable for the fiscal performance in their own jurisdiction, relative to neighbouring jurisdictions. The analysis is carried out using data on Swedish local governments. The approach used in the paper rests on the idea of yardstick competition theory, which formalizes the link between tax setting and voting behaviour. The results suggests that voters evaluate the incumbent party coalition based on relative fiscal policy, and provide evidence of yardstick competition effects. Moreover, unexpectedly, voters make performance comparisons of fiscal policies across municipalities with a different ideological position from that of their own municipality, suggesting there to be heterogeneity in the response of voters with respect to ideology.