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Intergovernmental Transfers and Re-Election Concerned Politicians

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  • Hickey, Ross

Abstract

This 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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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 27204.

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Date of creation: Aug 2010
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Handle: RePEc:pra:mprapa:27204

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Keywords: Career Concerns; Public Economics; Intergovernmental Transfers;

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  1. Arulampalam, Wiji & Dasgupta, Sugato & Dhillon, Amrita & Dutta, Bhaskar, 2008. "Electoral Goals and Center-State Transfers: A Theoretical Model and Empirical Evidence from India," IZA Discussion Papers 3376, Institute for the Study of Labor (IZA).
  2. Marcelin Joanis, 2009. "Intertwined Federalism: Accountability Problems under Partial Decentralization," CIRANO Working Papers 2009s-39, CIRANO.
  3. Dahlberg, Matz & Johansson, Eva, 1999. "On the Vote Purchasing Behavior of Incumbent Governments," Working Paper Series 1999:24, Uppsala University, Department of Economics.
  4. Ruben Enikolopov & Ekaterina Zhuravskaya, 2006. "Decentralization and Political Institutions," Working Papers w0065, Center for Economic and Financial Research (CEFIR).
  5. 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.
  6. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  7. Khemani, Stuti, 2007. "Does delegation of fiscal policy to an independent agency make a difference? Evidence from intergovernmental transfers in India," Journal of Development Economics, Elsevier, vol. 82(2), pages 464-484, March.
  8. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
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