Intergovernmental Transfers and Re-Election Concerned Politicians
AbstractThis paper studies intergovernmental transfers. Many intergovernmental transfers are said to serve political purposes. We augment a standard model of political career concerns to allow for multilevel governance. When elections are simultaneous, there is no equilibrium with non-zero transfers as the opportunity cost of a transfer is too high. However when elections are staggered, an equilibrium exists with positive transfers. These transfers are motivated by two factors; sabotaging challengers and rent smoothing. These transfers are non-partisan and an artifact of the electoral dynamics as prescribed by an electoral calendar and politicians' career concerns. This model produces an additional insight in understanding intergovernmental grants. These results are discussed with reference to the growing literature on the partisan basis of intergovernmental transfers.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27204.
Date of creation: Aug 2010
Date of revision:
Career Concerns; Public Economics; Intergovernmental Transfers;
Find related papers by JEL classification:
- H10 - Public Economics - - Structure and Scope of Government - - - General
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-18 (All new papers)
- NEP-MIC-2010-12-18 (Microeconomics)
- NEP-POL-2010-12-18 (Positive Political Economics)
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