Revenue Source and Electoral Accountability: Experimental Evidence from Local US Policymakers

Existing research suggests that tax-reliant governments are more accountable to citizens. This pattern is consistent with micro-level evidence that citizens who are taxed are more willing and able to make demands on leaders. However, there is no evidence on whether elected officials themselves view citizen pressures to spend tax and non-earned incomes differently. Using survey experiments conducted on elected municipal officials in the US, we find that officials report that taxes are less likely to be misused, relative to outside grants, and more likely to be spent on citizens’ preferences. This is driven by the perception that electoral penalties are higher when tax funds are misused. Officials believe citizens feel stronger ownership over local tax funds and seek more information about how they are used.