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The political determination of intergovernmental grants in Australia

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Author Info
Andrew Worthington
Brian Dollery

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Abstract

Intergovernmental grants have been conventionally explained on the basis of either equity/efficiency and/or institutional considerations. This paper seeks to model Australian intergovernmental grants by including both traditional public finance variables and public choice influences; that is, grants are used by federal government politicians to purchase political capital, thereby enhancing their own chances of reelection. The models employed in this paper are tested for six Australian states for the period 1981–82 to 1991–92 using unsystematic grant transfers. The results provide support for these public choice considerations, and highlight the importance of incorporating institutional factors and controlling for misspecification in the error structure in estimates of this type. Copyright Kluwer Academic Publishers 1998

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File URL: http://hdl.handle.net/10.1023/A:1017940409702
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Publisher Info
Article provided by Springer in its journal Public Choice.

Volume (Year): 94 (1998)
Issue (Month): 3 (March)
Pages: 299-315
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:pubcho:v:94:y:1998:i:3:p:299-315

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Grossman, Philip J, 1994. " A Political Theory of Intergovernmental Grants," Public Choice, Springer, vol. 78(3-4), pages 295-303, March.
  2. Mathews, Russell, 1985. "The Grants Commission's Relativities Proposals: A Comment," Australian Economic Papers, Blackwell Publishing, vol. 24(44), pages 214-17, June.
  3. Logan, Robert R, 1986. "Fiscal Illusion and the Grantor Government," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1304-18, December. [Downloadable!] (restricted)
  4. Kirchgassner, Gebhard & Schimmelpfenning, Jorg, 1992. " Closeness Counts If It Matters for Electoral Victory: Some Empirical Results for the United Kingdom and the Federal Republic of Germany," Public Choice, Springer, vol. 73(3), pages 283-99, April.
  5. Winer, Stanley L, 1983. "Some Evidence on the Effect of the Separation of Spending and Taxing Decisions," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 126-40, February. [Downloadable!] (restricted)
  6. Wright, Gavin, 1974. "The Political Economy of New Deal Spending: An Econometric Analysis," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 30-38, February. [Downloadable!] (restricted)
  7. Bungey, Mel & Grossman, Philip & Kenyon, Peter, 1991. "Explaining Intergovernmental Grants: Australian Evidence," Applied Economics, Taylor and Francis Journals, vol. 23(4A), pages 659-68, Part A, A.
  8. Davidson, Russell & MacKinnon, James G, 1981. "Several Tests for Model Specification in the Presence of Alternative Hypotheses," Econometrica, Econometric Society, vol. 49(3), pages 781-93, May. [Downloadable!] (restricted)
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  9. Hammes, David L & Wills, Douglas T, 1987. "Fiscal Illusion and the Grantor Government in Canada," Economic Inquiry, Oxford University Press, vol. 25(4), pages 707-13, October.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Chang Woon Nam & Ruediger Parsche, 2001. "Municipal Finance in Poland, the Slovak Republic, the Czech Republic and Hungary: Institutional Framework and Recent Development," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  2. Albert Solé-Ollé & Pilar Sorribas-Navarro, 2006. "The effects of partisan alignment on the allocation of intergovernmental transfers. Differences-in-differences estimates for Spain," Working Papers 2006-09, University of Kentucky, Institute for Federalism and Intergovernmental Relations. [Downloadable!]
    Other versions:
  3. Chang Woon Nam & Rüdiger Parsche, 2001. "Municipal Finance in Poland, the Slovak Republic, the Czech Republic and Hungary: Problems and Prospects," ERSA conference papers ersa01p162, European Regional Science Association. [Downloadable!]
  4. Jameson Boex & Jorge Martinez-Vazquez, 2005. "The Determinants of the Incidence of Intergovernmental Grants: A Survey of the International Experience," International Studies Program Working Paper Series, at AYSPS, GSU paper0509, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
  5. Stuti Khemani, 2004. "The Political Economy of Equalization Transfers," International Studies Program Working Paper Series, at AYSPS, GSU paper0413, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
  6. Khemani, Stuti, 2003. "Partisan politics and intergovernmental transfers in India," Policy Research Working Paper Series 3016, The World Bank. [Downloadable!]
  7. Hans Pitlik, 2004. "Zur Politischen Rationalitaet der Finanzausgleichsreform in Deutschland," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 239/2004, Department of Economics, University of Hohenheim, Germany. [Downloadable!]
  8. Picci, Lucio & Golden, Miriam, 2007. "Pork Barrel Politics in Postwar Italy, 1953–1994," MPRA Paper 5626, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  9. João Silva Moura Neto & Nelson Marconi & Paulo Eduardo Moledo Palombo & Paulo Roberto Arvate, 2006. "Vertical Transfers And The Appropriation Of Resources By The Bureaucracy: The Case Of Brazilian State Governments," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 136, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
    Other versions:
  10. Jonathan Rodden, 2009. "Federalism and Inter-Regional Redistribution," Working Papers 2009/3, Institut d'Economia de Barcelona (IEB). [Downloadable!]
  11. Germà Bel & Xavier Fageda, 2005. "Preventing competition because of “solidarity”: Rhetoric and reality of airport investments in Spain," Public Economics 0511012, EconWPA. [Downloadable!]
    Other versions:
  12. Linda Gonçalves Veiga & Maria Manuel Pinho, 2005. "The Political Economy of Portuguese Intergovernmental Grants," NIPE Working Papers 8/2005, NIPE - Universidade do Minho. [Downloadable!]
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