Electoral misgovernance cycles: evidence from wildfires and tax evasion in Greece

Abstract

We present detailed empirical evidence from Greece that around elections, misgovernance results in significant increases in wildfires and tax evasion and has important economic implications: these effects have led to the destruction of property or loss of government revenue estimated at 8 % of GDP. There are two plausible reasons why misgovernance might intensify around elections: (i) attention and effort of elected officials is directed to campaigning instead of governing; and (ii) the misgovernance may benefit special interests and serve as a pork barrel transfer that is hard to monitor or control. Empirically, we find that redistributive politics are likely a dominant cause of electoral misgovernance. In the case of wildfires we also find evidence that political competition tends to increase electoral misgovernance; furthermore, electoral misgovernance helps incumbents get reelected. While misgovernance may manifest differently among countries, our analysis suggests that electoral cycles everywhere may be much more multifaceted and harmful than previous literature suggests. Copyright Springer Science+Business Media New York 2014