PI of the Research Project “Local Governance: Taxation, Accountability, Performance”, sponsored by the Fundação para a Ciência e Tecnologia
Political economy deals with the design of political institutions to tackle agency problems which plague public governance. It is crucial to study local governments? accountability, because they have gained increasing importance fiscally, politically, and administratively (Arzaghi and Henderson, 2005). In Portugal, there is no regional government layer and all 278 mainland municipalities are ruled by the same constitutional framework, lending themselves naturally to empirical analysis. The research team has a comprehensive dataset on Portuguese municipalities, covering local finance, mayor characteristics, political affiliation, election outcomes, and local demographic, social, and economic controls. These data span the whole period of democratic governance in Portugal, since 1979. The three pillars of our project: taxation, politics, and performance shed light on possible mechanisms to improve local governance.