Not Welcome Anymore: The Effect of Electoral Incentives on the Reception of Refugees

Matteo Gamalerio

CESifo Working Paper Series 7212, CESifo Group Munich

https://www.cesifo-group.de/DocDL/cesifo1_wp7212.pdf

Review

This paper investigates how electoral incentives affect the reception of refugees in Italy. Since immigration has been shown to have an impact on electoral outcomes, and given that politicians can anticipate voters’ reactions, the author hypothesizes that governments can be expected to manipulate immigration policies to gain votes or to avoid losing popularity. The author uses data from Italian municipalities from 2005 to 2017, and exploits important features of the Italian government’s refugee allocation policy, which provides substantial fiscal grants to municipalities that choose to open a reception center for refugees and asylum seekers. Although municipal governments can decide whether or not to open a reception center, the timing of tenders is exogenous to local circumstances and elections. The author compared mayors who are in the final year of their term (i.e. just before elections) when a tender is issued, with mayors in other years of their term. Key results:

  • Electoral incentives have a detrimental effect on the reception of refugees. Specifically, the probability of opening a reception center in a municipality is 24 per cent lower when a tender is launched in the final year of a mayor’s term (i.e. just before new elections), compared to municipalities in other years of the term.
  • The author shows that the effect is stronger in municipalities where: (1) voters overestimate the presence of immigrants by more; (2) the pre-treatment share of migrants is higher—consistent with the theory that natives perceive migrants as a bigger threat to their economic resources and cultural dominance in places where the pre-existing fraction of foreigners is higher, and consistent with political economy research that shows that the effect of immigration on the success of extreme-right parties and anti-immigration policies is stronger where the pre-existing fraction of migrants is higher (but inconsistent with the theory that continuous contact between different groups should lead to more acceptance); (3) there is a higher share of voters with extreme-right political preferences; and (4) political competition is lower—consistent with the idea that, where political competition is higher, political parties compete for the support of swing voters, who normally care about non-ideological issues such as economic growth, rather than divisive issues like migration.
  • Voters learn about their misperception from opening a reception center (i.e. the arrival of new migrants need not constitute a threat). Distinguishing between the opening of new reception centers and the renewal of existing centers, reveals that the only mechanism driving the effect on the renewal of existing centers is the share of extreme-right voters. Voters who express anti-immigration preferences do not change their position after hosting refugees.
  • There are electoral costs associated with opening a refugee center in the final year of a mayoral term. There are electoral costs only for mayors who open a reception center just before elections (opening a refugee center in other years of the term is positively correlated with the vote shares at the following election), suggesting that electoral punishment may be driven by voters’ misperception of immigrants and by municipalities in which a bigger foreign population induces voters to perceive the arrival of new migrants as a threat. Voters may change views about the reception of refugees if given enough time to understand what hosting refugees means.
  • The effect of electoral incentives on the reception of refugees can persist beyond the end of the electoral term, leading to an unbalanced reception of refugees in the medium and long run. Municipalities in which electoral incentives affected the reception of refugees more strongly in the past host a smaller share of refugees and have a lower probability of opening a refugee center in the last year available in the data. This medium run persistence may be driven by municipalities in which voters overestimate the presence of migrants and by municipalities with higher shares of migrants and higher shares of extreme-right voters. Political competition seems to attenuate this medium run persistence of the negative effect.
  • By refusing to host refugees, Italian mayors give up fiscal resources that could benefit the local economy. The reception of refugees is associated with an increase in total municipal expenditures, which seems to be funded by grants from higher levels of government, and not by local taxes. This increase in expenditures is redistributed toward types of expenditures that could benefit the local economy.

The author concludes that the heterogeneity behind the negative effect of electoral incentives may explain why is difficult to redistribute refugees evenly across and within countries. Moreover, the fear of losing popular support induces municipal governments to forego resources that could benefit the local economy.

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