Decentralization and Local Governance: Fiscal Consequences of the Indirect Mayoral Elections on Italian Primary Education

We examine whether the selection method of local political representatives affected education spending under decentralization and limited enfranchisement. We exploit a quasi-experiment from Italy’s political history: the 1889 introduction of indirect mayoral elections in selected municipalities. Difference-in-discontinuities estimates show that treated municipalities experienced a smaller increase in primary education spending than controls. This outcome was driven by limited franchise and elite capture. By reinforcing the preferences of a narrowly enfranchised electorate, indirect elections help explain why decentralization failed to improve education provision in late nineteenth-century Italy, beyond explanations based on limited fiscal capacity.