Voter Responsiveness to Signals of Local Government Financial Health

Local elected leaders make decisions that affect service delivery and quality of life. But budgetary constraints mean that cities cannot indefinitely expand and improve services. Maintaining fiscal balance may be prudent, but doing so can impair service delivery. How are elected officials incentivized to make those trade-offs? Do voters actually care about the financial health of their city government? This research examines these questions in two ways. First, it uses data on elections, local finance, and the political environment in 44 large city governments to demonstrate a relationship between signals of financial health and voter support for incumbents in local elections. Second, it tests those findings using an experimental design that manipulates two dimensions of the political environment, crime rate, and financial health via credit rating. Both demonstrate that voters in local elections hold elected officials accountable for changes in financial health.