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Does Partisan Alignment Affect the Electoral Reward of Intergovernmental Transfers?

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  • Albert Solé-Ollé
  • Pilar Sorribas-Navarro

Abstract

In this paper we test the hypothesis that intergovernmental grants allocated to co-partisans buy more political support than grants allocated to local governments controlled by opposition parties. We use a rich Spanish database containing information about the grants received by 617 municipalities during the period 1993-2003 from two different upper-tier governments (Regional and Upper-local), as well as data of municipal voting behaviour at three electoral contests held at the different layers of government during this period. Therefore, we are able to estimate two different vote equations, analysing the effects of grants given to aligned and unaligned municipalities on the vote share of the incumbent party/parties at the regional and local elections. We account for the endogeneity of grants by instrumenting them with the average amount of grants distributed by upper-layer governments. The results suggest that grants given to co-partisans buy some political support, but that grants given to opposition parties do not bring any votes, suggesting that the grantee reaps as much political credit from intergovernmental grants as the grantor.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2335.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2335

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Keywords: voting; parties; grants;

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References

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  1. Case, A, 1996. "Election Goals and Income Redistribution : Recent Evidence from Albania," Papers, Princeton, Woodrow Wilson School - Public and International Affairs 177, Princeton, Woodrow Wilson School - Public and International Affairs.
  2. Steven D. Levitt & James M. Snyder, Jr., 1995. "The Impact of Federal Spending on House Election Outcomes," NBER Working Papers 5002, National Bureau of Economic Research, Inc.
  3. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, Springer, vol. 52(3), pages 273-297, January.
  4. Dahlberg, Matz & Johansson, Eva, 1999. "On the Vote Purchasing Behavior of Incumbent Governments," Working Paper Series, Uppsala University, Department of Economics 1999:24, Uppsala University, Department of Economics.
  5. Philip J. Grossman, 1987. "A Political Theory of Inter-Governmental Grants," School of Economics Working Papers, University of Adelaide, School of Economics 1987-06, University of Adelaide, School of Economics.
  6. Albert Solé-Ollé, 2006. "The effects of party competition on budget outcomes: Empirical evidence from local governments in Spain," Public Choice, Springer, Springer, vol. 126(1), pages 145-176, January.
  7. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0284, National Bureau of Economic Research, Inc.
  8. Avinash Dixit & John Londregan, 1998. "Ideology, Tactics, And Efficiency In Redistributive Politics," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(2), pages 497-529, May.
  9. Castells, Antoni & Sole-Olle, Albert, 2005. "The regional allocation of infrastructure investment: The role of equity, efficiency and political factors," European Economic Review, Elsevier, Elsevier, vol. 49(5), pages 1165-1205, July.
  10. Khemani, Stuti, 2003. "Partisan politics and intergovernmental transfers in India," Policy Research Working Paper Series 3016, The World Bank.
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Cited by:
  1. Bianchini Laura & Revelli Federico, 2011. "Green Polities: Urban Environmental Performance and Government Popularity," Department of Economics and Statistics Cognetti de Martiis. Working Papers, University of Turin 201104, University of Turin.
  2. Baskaran, Thushyanthan, 2014. "Bailouts and austerity," Center for European, Governance and Economic Development Research Discussion Papers 212, University of Goettingen, Department of Economics.
  3. Maria Teresa Balaguer-Coll & María Isabel Brun-Martos & Anabel Forte & Emili Tortosa-Ausina, 2014. "Determinants of local governments'­ reelection: New evidence based on a Bayesian approach," Working Papers, Economics Department, Universitat Jaume I, Castellón (Spain) 2014/06, Economics Department, Universitat Jaume I, Castellón (Spain).
  4. Stephan Litschig & Kevin Morrison, 2010. "Government spending and re-election: Quasi-experimental evidence from Brazilian municipalities," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 1233, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2012.
  5. Oskar Nupia, 2011. "Anti-Poverty Programs and Presidential Election Outcomes: Familias en Acción in Colombia," DOCUMENTOS CEDE, UNIVERSIDAD DE LOS ANDES-CEDE 008743, UNIVERSIDAD DE LOS ANDES-CEDE.
  6. Giardina, Emilio & Cavalieri, Marina & Guccio, Calogero & Mazza, Isidoro, 2009. "Federalism, Party Competition and Budget Outcome: Empirical Findings on Regional Health Expenditure in Italy," MPRA Paper 16437, University Library of Munich, Germany.
  7. Steffen Osterloh, 2011. "Can Regional Transfers Buy Public Support? Evidence from EU Structural Policy," Working Papers, Oesterreichische Nationalbank (Austrian Central Bank) 169, Oesterreichische Nationalbank (Austrian Central Bank).
  8. Stephan Litschig & Kevin Morrison, 2012. "Government Spending and Re-election: Quasi-Experimental Evidence from Brazilian Municipalities," Working Papers 515, Barcelona Graduate School of Economics.
  9. Padovano, Fabio, 2012. "The drivers of interregional policy choices: Evidence from Italy," European Journal of Political Economy, Elsevier, Elsevier, vol. 28(3), pages 324-340.

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