Skip to main content

Please enter a keyword and click the arrow to search the site

Do financial markets affect election outcomes? Evidence from municipal bond ratings



Publishing details

Social Sciences Research Network

Authors / Editors

Cunha I;Ferreira M A;Silva R

Publication Year



We show that financial markets can affect political outcomes. Specifically, we study the effects of municipal bond ratings on gubernatorial and mayoral elections in the United States. We find that incumbent politicians in upgraded municipalities experienced an increase in their vote shares. Our evidence is consistent with ratings affecting elections directly by improving voter perceptions of the quality of incumbents, and indirectly by improving local economic conditions. We identify these effects by exploiting exogenous variation in municipal bond ratings due to Moody's recalibration of its scale in 2010.


Elections; Credit ratings; Financial constraints; Municipal bonds; Government spending; Economic conditions


Social Sciences Research Network

Available on ECCH


Select up to 4 programmes to compare

Select one more to compare
subscribe_image_desktop 5949B9BFE33243D782D1C7A17E3345D0

Sign up to receive our latest news and business thinking direct to your inbox


Sign up to receive our latest course information and business thinking

Leave your details above if you would like to receive emails containing the latest thought leadership, invitations to events and news about courses that could enhance your career. If you would prefer not to receive our emails, you can still access the case study by clicking the button below. You can opt-out of receiving our emails at any time by visiting: or by unsubscribing through the link provided in our emails. View our Privacy Policy for more information on your rights.