Is there duration dependence in Portuguese local governments’ tenure? Vítor Castro and Rodrigo Martins Faculty of Economics, University of Coimbra, Portugal NIPE and GEMF, Portugal INFER Annual Conference 2012 Coimbra, May

2 Motivation  This paper analyses the presence of duration dependence in Portuguese local governments’ tenure and the impact of some explanatory variables on their duration.  Existing studies: government termination, leadership tenure, politicians career management (in the US).  Research on party duration remains quite limited, especially on second order (or local) elections.  The political and economic impact of a change in governing parties is usually more significant than modifications in the composition of the government that do not imply changes in the ruling party.  Therefore, the survivability of parties in office is an important perspective of democratic stability to be studied.

3 Literature  Deterministic duration analysis: Analysis of the impact of majority status, ideological compactness, party system fragmentation, economic environment, international conflicts, scandals on the duration of national governments. [Taylor & Herman (1971); Laver (1974); Dodd (1976); Warwick (1979); Strom (1985); Browne et al. (1984); Frendreis et al. (1986)]  Event-history methods: Combine the analysis of the risk of termination over the course of a government’s life with the impact of some covariates (deterministic analysis). [King et al. (1990); Warwick & Easton (1992); Warwick (1992, 1994); Alt & King (1994); Diermeier & Stevenson (1999, 2000); Diermeier & Merlo (2000); Finocchiaro & Lin (2000)]

4 Literature  Event-history methods:  King et al. (1990) and Alt & King (1994) show that the risk of government termination is constant over time.  Warwick & Easton (1992) find evidence of increasing hazard rates over governments’ lives.  Finocchiaro & Lin (2000) show that the behaviour of the hazard rate is not monotonic: the likelihood of an electoral defeat decreases at the early stage of a member's career, with the incumbent becoming entrenched in safe seats after the 3rd term; but a fatigue effect appears after the 10th term.

5 Literature  Instead of governments’ duration, other studies focuses on: the length of political leaders’ tenure [Bienen & deWalle (1991)] the duration of party control in the US presidential elections [Lin & Guillen (1998)] the length of time governing parties stay in the national executive office [Maeda & Nishikawa (2006)]  In sum, the literature has focused on the analysis of cabinet duration, government survivability in parliamentary democracies, leadership tenure and career management.  In this paper, we move a step forward and investigate party tenure at the local level as another aspect of political stability in a multiparty proportional system.

6 Model – Duration Analysis  Hazard function [h(t)]: measures the likelihood of an event ending in period t, given that it lasts until t. dh(t)/dt>0 => Positive Duration Dependence => the probability of a party leaving office at term t, given that it has stayed until t, increases with t.  Parametric continuous-time duration model: h(t,x)=h 0 (t)exp{β’x} (proportional hazards model) where h 0 (t)=γpt p-1 (baseline hazard function => Weibull model) with p>1 => Positive Duration Dependence

7 Model – Duration Analysis  Although the length of time a party is in office is a continuous-time process, available data are inherently discrete (terms).  Discrete-time models allow inclusion of time-varying covariates.  Discrete-time proportional hazards model: P it = Pr[T i =t|T i ≥t, x it ] = 1-exp{-h t exp{β’x it }}   P it = 1-exp{-exp{θ t +β’x it }}   ln[-ln(1-P it )] = θ t + β’x it (complementary log-log function) where θ t =lnh t =α+(p-1)lnt (discrete-time analogue to Weibull) θ t =α 0 +α 1 t+α 2 t 2 +α 3 t 3 +… (polynomial-in-time, cubic splines) θ t =α 0 +α 1 d 1 +α 2 d 2 +α 3 d 3 +… (term or time-dummies)

8 Model – Estimation  Continuous-time log-likelihood function: S (. ) - survival function; c i = 0 when observations are censored (= 1, otherwise)  Discrete-time log-likelihood function: y it = 1, if party’s i incumbency ends at term or time t (= 0, otherwise)

9 Data  278 mainland municipalities.  Period: (8 electoral periods/terms).  Data are organized in spells of terms in office.  385 observed tenure spells in the sample.  A spell represents the number of terms a party is in office (TLGov = t).  Several economic, political, and individual variables are used as regressors.

10 Data – variables

11 Data – variables

12 Empirical Analysis

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15 Main findings I  Evidence of positive duration dependence: the more time a party remains in charge of the local government, the higher is the likelihood of leaving it.  The likelihood of leaving office also increases when: local economic environment deteriorates; political support decreases; number of parties (fragmentation/competition) increases; local and national governments are of the same party; municipalities are small and the leader is/becomes older.

16 More flexible specifications  Weibull distribution is monotonic : only rises or declines.  May not be empirically realistic in this case.  Note slumps in the hazard rates at 4th and 5th terms.  Test other more flexible specifications for the hazard function: Polynomial-in-time; Time-dummies; Cubic splines.

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20 Main findings II  The likelihood of incumbent parties leaving office increases until the 3rd term, but then it decreases until the 6th, before starting to increase again.  In line with the “sophomore effect”: [Erikson (1972), Alford and Hibbing (1981) and Finocchiaro and Lin (2000)] The process of building up reputation takes 3 terms; The costs of ruling become dominant after the 6th term.

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23 Main findings III  Mayor’s decision to run for office again increases his party’s chances of remaining in office  Strong bond between the party in office and the political capital and expertise acquired by its leader.  Political parties benefit from the “status” and stability of its leader.  “Sophomore effect” is confirmed: Stronger when mayors decide not to run for another term. Supports the limit of 3 terms established in 2005.

24 Conclusions  Evidence of positive dur dep in local governance.  But the hazard function is not monotonic: The likelihood of the incumbent party leaving office increases until the 3rd term, but then it decreases until the 6th, before starting to increase again. (Sophomore effect) Higher when the party leader decides not to run again. Supports the limit of 3 terms established in  Length of local governments’ tenure increases when: the local economic environment is favourable; the incumbent party has enough political support; the degree of political fragmentation/competitiveness is low.  Dimension (municipality) & Age (leader) also affect tenure.

25 The End Comments are welcome! Thank you!