Electoral incentives to target investment in roads: Evidence from Italian municipalities

Using a comprehensive dataset on Italian municipalities, we test whether investments in road services are affected by political manipulations motivated by the need of targeting a specific group of voters (construction firms). We show that road services investment in the year before election is 26% higher in municipalities with low density of construction firms and 40% higher in municipalities with high density of construction firms than in the electoral year. This result is confirmed by the fact that in the pre-electoral year the probability that public procurement on road services is assigned to a local firm increases by 52 percentage points with respect to the electoral year, for municipalities with high density of construction firms. Finally, we do not detect any relationship between investments in road services and the local road safety. These findings suggest that politicians manipulate investments in road services for re-electoral purposes.