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The effects of partisan alignment on the allocation of intergovernmental transfers. Differences-in-differences estimates for Spain

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  • Albert Solé-Ollé

    ()
    (Facultat de Ciències Econòmiques, Universitat de Barcelona, Avda. Diagonal 690, torre 4, planta 2, 08034 Barcelona, Spain)

  • Pilar Sorribas-Navarro

    (Facultat de Ciències Econòmiques, Universitat de Barcelona, Avda. Diagonal 690, torre 4, planta 2, 08034 Barcelona, Spain)

Abstract

In this paper we test the hypothesis that municipalities aligned with upper-tier grantor governments (i.e., controlled by the same party) will receive more grants than those that are unaligned. We use a rich Spanish database, which provides information on grants received by nearly 900 municipalities during the period 1993-2003 from three different upper-tier governments (i.e., Central, Regional and Upper-local). Since three elections were held at each tier during this period, we have enough within-municipality variation in partisan alignment to provide differences-in-differences estimates of the effects of alignment on the amount of grants coming from each source. Moreover, the fact that a municipality may simultaneously receive grants from aligned and unaligned grantors allows us to use a triple-differences estimator, which consists of estimating the effects of changing alignment status on the change in grants coming from the aligned grantors relative to the change in grants coming from the unaligned ones. The results suggest that partisan alignment has a sizeable positive effect on the amount of grants received by municipalities. Length: 33 pages

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Bibliographic Info

Paper provided by University of Kentucky, Institute for Federalism and Intergovernmental Relations in its series Working Papers with number 2006-09.

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Date of creation: Nov 2006
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Handle: RePEc:ifr:wpaper:2006-09

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Keywords: grant allocation; alignment; electoral competition;

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  14. Worthington, Andrew C & Dollery, Brian E, 1998. " The Political Determination of Intergovernmental Grants in Australia," Public Choice, Springer, vol. 94(3-4), pages 299-315, March.
  15. Strömberg, David, 2002. "Optimal Campaigning in Presidential Elections: The Probability of Being Florida," Seminar Papers 706, Stockholm University, Institute for International Economic Studies.
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  18. Khemani, Stuti, 2003. "Partisan politics and intergovernmental transfers in India," Policy Research Working Paper Series 3016, The World Bank.
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