Abstract
We present detailed empirical evidence from Greece that around elections, misgovernance results in significant increases in wildfires and tax evasion and has important economic implications: these effects have led to the destruction of property or loss of government revenue estimated at 8 % of GDP. There are two plausible reasons why misgovernance might intensify around elections: (i) attention and effort of elected officials is directed to campaigning instead of governing; and (ii) the misgovernance may benefit special interests and serve as a pork barrel transfer that is hard to monitor or control. Empirically, we find that redistributive politics are likely a dominant cause of electoral misgovernance. In the case of wildfires we also find evidence that political competition tends to increase electoral misgovernance; furthermore, electoral misgovernance helps incumbents get reelected. While misgovernance may manifest differently among countries, our analysis suggests that electoral cycles everywhere may be much more multifaceted and harmful than previous literature suggests.
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Notes
We are not the first to suggest that wildfires increase around elections (see among others Kailidis et al. 2004), though to the best of our knowledge no one has previously used even elementary statistical analysis to measure this effect. We hope that early versions of this paper have contributed to a broader appreciation of these regularities through the attention they have generated in both Greek and international media (e.g. Walker 2010; Wells 2011).
A former Minister of Finance has openly acknowledged that “The first thing a government does in an election year is to pull the tax collectors off the streets” (Lewis 2011: 49).
See http://en.wikipedia.org/wiki/2007_Greek_forest_fires and http://earthtrends.wri.org/text/forests-grasslands-drylands/country-profile-73.html. Our empirical analysis in the next section is robust to the exclusion of the 2007 wildfires and we report regression results for two separate subsamples.
According to United Nations Economic Commission for Europe Forest Fire Statistics Timber Bulletin, Vol. LV (2002), no. 4, Table 8, in 2001 just 23 % of area burnt in Greece had a known cause. Comparing to some countries with similar risk factors, the respective figure for Spain was 50 % and for Turkey 76 %.
There is considerable political pressure from land owners to delay such registries, as for many of them it would reveal that their property was locked in a legal status in which it has little value.
According to the president of the Panhellenic Union of Researchers and Geotechnicians as quoted by Kathimerini newspaper, 26 September 2010, p. 4.
A relevant case in point: when the devastating 2007 wildfires broke out, co-ordinating the fire-fighting effort was delayed by several critical hours due to the absence of a key Minister who was campaigning at his constituency.
This may be especially important considering that the strongest electoral manipulations of fiscal policies have been observed in developing countries where tax evasion is likely to be rampant; see, for example, Brender and Drazen (2005).
The minimum permissible time between the announcement of elections and the election date is three weeks in Greece but surprise elections of this type are extremely rare.
Data for 2010 (which was not an election year) are available on a provisional basis only so we have not included them, though it is clear that fires in 2010 were much less damaging than in any recent election year.
We repeated the regression analysis with a dummy variable for that period and found that it was insignificant, suggesting a relative paucity of fires during the dictatorship may be purely due to the lack of an election in this period. There is no evidence that the data were manipulated in this period and, to the best of our knowledge, experts have not questioned the accuracy of figures collected during the dictatorship.
Three major wildfire seasons were also observed in 1965, 1988, and 1998 during which no election took place. Remarkably, all three cases coincide with events that led to relaxations in law enforcement similar to and probably more severe than those produced by electoral misgovernance. In the summer of 1965, there was a major political upheaval throughout Greece caused by the ousting of the elected Prime Minister and repeated attempts to impose a government of defectors. The country was paralyzed from massive political demonstrations, while the functioning of the state was critically affected by the extreme frequency of changes in the executive. For instance, the post of the minister responsible for forests (Agriculture minister) was manned by four different persons between July and September of that year. In October 1987, the Government passed Law 1734, according to which areas used for livestock grazing (“voskotopia”) could be eligible for obtaining construction permits. This created incentives for diminishing the forest density of land and, according to Kailidis et al. (2004), explains the intensity of wildfires that took place the following summer of 1988. In a separate analysis of fires due solely to agrarian activities, Dimitrakopoulos and Mitsopoulos (2006) show that they peaked in 1988 leaving 26,009 hectares of forest burnt, more than three times the average area of 8,600 hectares burnt for similar reasons over the 1980–1997 period. Wildfires in 1998 are perhaps the clearest case of the effects of a low quality of governance unrelated to elections: in an attempt to re-organize the wildfire management agency, the Government assigned fire-fighting responsibility to the Fire Brigades Commission, replacing a previously decentralized structure headed by the forest guard—for an account see Xanthopoulos (2006). Lack of cooperation between the various groups resulted in a new peak in forest fires, and the new agency established credibility only after a substantial reduction in wildfires in subsequent years.
Before the 1967 dictatorship the two main parties were the National Radical Union (conservatives) and the Center Union (democrats). After the restoration of democracy in 1974, the conservative party was renamed and the center party was largely absorbed by the newly founded socialist party, hence the common treatment. We also tried a number of alternative specifications that took into account whether the party leader was the incumbent Prime Minister at the time of the elections, the duration of each incumbency and other similar factors, but were unable to detect any partisan effect.
We considered including multiple instruments associated with weather conditions in our regressions, but found that this significantly reduced the strength of our instruments. We could not find an appealing instrument in the case of tax evasion. Lags of changes in monthly tax revenue were the only instrument worth considering, but this has low correlation with current changes in revenue and may not be independent of anticipated election outcomes. Using it as an instrument we were unable to find a significant effect of tax evasion on election outcomes.
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Acknowledgements
The authors are grateful to Mr. D. Varakis for collecting the fiscal data series, to Mr. Lalas for providing the precipitation and temperature data and to Dr. G. Xanthopoulos for the data on forest fires in Greece and helpful discussions. We thank Costas Roumanias for several very useful discussions and Christos Antoniadis for excellent research assistance. We gratefully acknowledge helpful comments from Sarantis Kalyvitis and seminar participants at the Santa Fe Institute, Harvard and Yale and conference participants at the CRETE 2009 Conference.
Disclaimer All views expressed in the paper are solely those of the authors and do not necessarily reflect the position of any other person or institution. The second author was Minister of Finance in Greece during 2001–2004, a term which led to several insights on the causes and manifestation of electoral misgovernance.
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Appendices
Appendix A: List of Greek parliamentary/legislative/national election dates 1955–2009
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19 February 1956, 11 May 1958,
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29 October 1961, 3 November 1963, 16 February 1964,
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17 November 1974, 20 November 1977,
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19 October 1981, 3 June 1985, 18 June 1989, 5 November 1989,
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8 April 1990, 10 October 1993, 22 September 1996,
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8 April 2000, 7 March 2004, 16 September 2007, 4 October 2009.
Appendix B: International evidence for effect of elections on wildfires and tax evasion
Combining several data sources we were able to amass a limited data set with which to offer a preliminary investigation into the relationship between elections, tax evasion and wildfires in other countries (Tables 6 and 7).
In sum, there is no effect of elections on wildfires and only a weak effect on tax evasion when pooling across all countries. However, there is some evidence that countries that are more corrupt tend to have more wildfires and more tax evasion in election years. Given the short samples we have to work with in each country and the fact that institutional conditions may preclude these specific manifestations of electoral misgovernance in many countries, we consider this evidence as highly suggestive of an international dimension to the misgovernance effect we describe.
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Skouras, S., Christodoulakis, N. Electoral misgovernance cycles: evidence from wildfires and tax evasion in Greece. Public Choice 159, 533–559 (2014). https://doi.org/10.1007/s11127-013-0071-0
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DOI: https://doi.org/10.1007/s11127-013-0071-0