The Local Politician: Loyal to the Party or Responsive to the Local Constituency?

The community equilibrium model of local fiscal policy‐making perceives of political leaders as ‘invisible hands’ or as anonymous, reactive figures who automatically adapt to the preferences of the citizenry. The party model, in contrast, views political leaders as willful representatives of certain interests in society who will pursue policies that are in accordance with the preferences of the party and its followers. In a context which is clearly biased in favor of the latter, the two models are tested. Under these extreme circumstances the community equilibrium model comes out as the most fruitful with respect to prediction of the fiscal behavior of local political leaders.