The Political Economy of Portuguese Intergovernmental Grants

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The Political Economy of Portuguese Intergovernmental Grants

Author Info

Linda Gonçalves Veiga () (Universidade do Minho - NIPE)
Maria Manuel Pinho (Universidade do Porto)

Abstract

We use a large and unexplored dataset covering all mainland Portuguese municipalities from 1979 to 2002 to evaluate the impact of political forces in the allocation of grants from the central government to local authorities. Empirical results clearly show that, besides variables that proxi local population needs and the macroeconomic situation of the country, political variables condition the granting system: (1) grants increase in municipal and legislative election years, (2) the larger the number of years a mayor has been in office, the larger the amount of funds transferred to his/her municipality. These effects are particularly strong for grants that are not formula-determined.

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Paper provided by NIPE - Universidade do Minho in its series NIPE Working Papers with number 8/2005.

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Date of creation: 2005
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Handle: RePEc:nip:nipewp:8/2005

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Postal: Núcleo de Investigação em Políticas Económicas, Escola de Economia e Gestão, Universidade do Minho, P-4710-057 Braga, Portugal
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Find related papers by JEL classification:
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior

This paper has been announced in the following NEP Reports:

NEP-ALL-2005-06-19 (All new papers)
NEP-PBE-2005-06-19 (Public Economics)
NEP-POL-2005-06-19 (Positive Political Economics)
NEP-PUB-2005-06-19 (Public Finance)

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