Religiosity and local debt repayment: evidence from Italian mayors

Abstract

Does a politician’s religion influence their policymaking? While existing research has examined how gender, class, and ethnicity shape political decisions, the role of religiosity remains understudied. This paper investigates how religious values influence debt repayment decisions among local politicians. I develop a novel measure of individual religiosity, based on names matching local patron saints, and apply it to 62,908 candidates in Italian municipal elections. Using a regression discontinuity design, I find that narrowly elected religious Catholic mayors are more likely to increase debt repayment. This effect likely reflects two mechanisms: Catholic moral teachings, which stress the obligation to repay debt, and risk aversion rooted in religion. Overall, these findings demonstrate that religion meaningfully shapes the fiscal behavior of elected officials.