A long-standing issue in political economics is whether party control makes a difference in determining fiscal and economics policies. This question is very difficult to answer empirically since parties are not randomly selected to govern political entities. This paper uses a...

The paper examines the accumulation of debt by Swedish local governments. I find that right-wing governments accumulate more debt when facing a higher probability of defeat, whereas the opposite occurs for left-wing governments. These effects are sizable: a right-wing government increases its...