Voter Turnout and Fiscal Policy

Abstract: Though a large literature on causes of voter turnout has flourished, there is scant evidence on consequences of turnout on policies implemented in practice. Using data on French municipalities, and instrumental variables for turnout based on rainfall and influenza incidence, we estimate that a 1 percent increase in turnout decreases the municipal budget by more than 2 percent. This effect is mediated by a decrease in sales and purchases of physical assets. With a model of electoral competition, we show that a party with a low budget platform has a numerical advantage causing its win when turnout is high.