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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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Author Info
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)

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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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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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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior

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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. Dixit, Avinash & Londregan, John, 1998. "Fiscal federalism and redistributive politics," Journal of Public Economics, Elsevier, vol. 68(2), pages 153-180, May. [Downloadable!] (restricted)
  2. Andrew Worthington & Brian Dollery, 1998. "The political determination of intergovernmental grants in Australia," Public Choice, Springer, vol. 94(3), pages 299-315, March. [Downloadable!] (restricted)
    Other versions:
  3. Strömberg, David, 2002. "Optimal Campaigning in Presidential Elections: The Probability of Being Florida," Seminar Papers 706, Stockholm University, Institute for International Economic Studies. [Downloadable!]
  4. Grossman, Philip J, 1994. " A Political Theory of Intergovernmental Grants," Public Choice, Springer, vol. 78(3-4), pages 295-303, March.
  5. Strömberg, David, 2002. "Optimal Campaigning in Presidential Elections: The Probability of Being Florida," CEPR Discussion Papers 3372, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Case, A, 1996. "Election Goals and Income Redistribution : Recent Evidence from Albania," Papers 177, Princeton, Woodrow Wilson School - Public and International Affairs.
    Other versions:
  7. Castells, Antoni & Sole-Olle, Albert, 2005. "The regional allocation of infrastructure investment: The role of equity, efficiency and political factors," European Economic Review, Elsevier, vol. 49(5), pages 1165-1205, July. [Downloadable!] (restricted)
  8. Dahlberg, Matz & Johansson, Eva, 1999. "On the Vote Purchasing Behavior of Incumbent Governments," Working Paper Series 1999:24, Uppsala University, Department of Economics. [Downloadable!]
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  9. B. Dahlby & L. S. Wilson, 1994. "Fiscal Capacity, Tax Effort, and Optimal Equalization Grants," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 657-72, August. [Downloadable!] (restricted)
  10. Albert Solé-Ollé, 2006. "The effects of party competition on budget outcomes: Empirical evidence from local governments in Spain," Public Choice, Springer, vol. 126(1), pages 145-176, January. [Downloadable!] (restricted)
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  11. Snyder, James M, 1989. "Election Goals and the Allocation of Campaign Resources," Econometrica, Econometric Society, vol. 57(3), pages 637-60, May. [Downloadable!] (restricted)
  12. David E. Wildasin, 2004. "The Institutions of Federalism: Toward an Analytical Framework," Public Economics 0403006, EconWPA. [Downloadable!]
  13. Johansson, Eva, 2003. "Intergovernmental grants as a tactical instrument: empirical evidence from Swedish municipalities," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 883-915, May. [Downloadable!] (restricted)
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Cited by:
(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. Hikaru Ogawa & David Wildasin, 2007. "Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking," Working Papers 2007-06, University of Kentucky, Institute for Federalism and Intergovernmental Relations. [Downloadable!]
    Other versions:
  2. Christos Kotsogiannis & Robert Schwager, 2006. "Fiscal Equalization and Yardstick Competition," Working Papers 2006-15, University of Kentucky, Institute for Federalism and Intergovernmental Relations. [Downloadable!]
  3. David Wildasin, 2007. "Pre-Emption: Federal Statutory Intervention in State Taxation," Working Papers 2007-05, University of Kentucky, Institute for Federalism and Intergovernmental Relations. [Downloadable!]
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