This paper explores the link between local governments’ performance and electoral behaviour, and in particular how voters’ capacity (or willingness) to hold politicians into account for their performance is correlated with the level of social capital in a locality. We employ a new measure of municipal performance and we find that its variation is heavily correlated with the level of social capital (or civic values) in that municipality. We investigate the channels through which this may operate looking at voting behaviour in high and low social capital municipalities. We find that in municipalities with higher levels of social capital voters hold mayors into account for their performance, as measured by the central government efficiency calculations, while in low social capital locations voting behaviour is uncorrelated with efficiency and performance, but is very reactive to changes in local taxation.
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