We study the impact of political contestability on the choice of rule-based contracts through the municipal bond market. We provide evidence that when the probability of losing office is high, mayors are more likely to issue expensive revenue bonds over cheaper general obligation bonds, and to...

We study the link between the choice of rule-based public contracts and political hazards using the municipal bond market. While general obligation bonds are serviced from all municipal revenue streams and offer elected officials financial flexibility, revenue bonds limit the discretion that...

I study the link between the choice of rule-based contracts and political competition through the municipal bond market. I provide evidence that when the probability of losing office is high, mayors are more likely to issue revenue bonds over general obligation bonds and to choose competitive...