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Inter-regional redistribution through infrastructure investment: tactical or programmatic?

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  • Albert Solé-Ollé

    (Universitat de Barcelona & Institut d’Economia de Barcelona (IEB))

Abstract

In this paper we analyze the effects of both tactical and programmatic politics on the inter-regional allocation of infrastructure investment. We use a panel of data for the Spanish electoral districts during the period 1964-2004 to estimate an equation where investment depends both on economic and political variables. The results show that tactical politics do matter since, after controlling for economic traits, the districts with more ‘Political power’ still receive more investment. These districts are those where the incumbents’ Vote margin of victory/ defeat in the past election is low, where the Marginal seat price is low, where there is Partisan alignment between the executives at the central and regional layers of government, and where there are Pivotal regional parties which are influential in the formation of the central executive. However, the results also show that programmatic politics matter, since inter-regional redistribution (measured as the elasticity of investment to per capita income) is shown to increase with the arrival of the Democracy and EU Funds, with Left governments, and to decrease the higher is the correlation between a measure of ‘Political power’ and per capita income.

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  • Albert Solé-Ollé, 2009. "Inter-regional redistribution through infrastructure investment: tactical or programmatic?," Working Papers XREAP2009-13, Xarxa de Referència en Economia Aplicada (XREAP), revised Nov 2009.
    • Handle: RePEc:xrp:wpaper:xreap2009-13
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    Cited by:

    1. Brice Fabre, 2018. "The Impact of Local Income Inequality on Public Goods and Taxation: Evidence from French Municipalities," PSE Working Papers halshs-01721825, HAL.
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    3. Rocha, Bruno T. & Afonso, Nuno & Melo, Patrícia C. & de Abreu e Silva, João, 2022. "What drives the allocation of motorways? Evidence from Portugal's fast-expanding network," Journal of Transport Geography, Elsevier, vol. 102(C).
    4. Stephane Straub, 2011. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 683-708.
    5. Miquel-Àngel Garcia-López & Albert Solé-Ollé & Elisabet Viladecans Marsal, 2014. "Do Land Use Policies Follow Road Construction," CESifo Working Paper Series 4672, CESifo Group Munich.
    6. Anastasios Kitsos & Antonios Proestakis, 2021. "Mediating distributive politics: political alignment and electoral business cycle effects on municipality financing in Greece," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(1), pages 1-26, August.
    7. Mohanty, Biswajit & Bhanumurthy, N. R. & Dastidar, Ananya Ghosh, 2017. "What explains Regional Imbalances in Infrastructure?: Evidence from Indian States," Working Papers 17/197, National Institute of Public Finance and Policy.
    8. Gonschorek, Gerrit J. & Schulze, Günther G. & Sjahrir, Bambang Suharnoko, 2018. "To the ones in need or the ones you need? The political economy of central discretionary grants − empirical evidence from Indonesia," European Journal of Political Economy, Elsevier, vol. 54(C), pages 240-260.
    9. Garcia-López, Miquel-Ángel & Holl, Adelheid & Viladecans-Marsal, Elisabet, 2015. "Suburbanization and highways in Spain when the Romans and the Bourbons still shape its cities," Journal of Urban Economics, Elsevier, vol. 85(C), pages 52-67.
    10. Biswajit Mohanty & N.R. Bhanumurthy & Ananya Ghosh Dastidar, 2017. "What explains regional imbalances in public infrastructure expenditure? Evidence from Indian states," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 24(2), pages 113-139, December.
    11. Markus Reischmann, 2016. "Empirical Studies on Public Debt and Fiscal Transfers," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 63.
    12. Pilar Sorribas-Navarro & Antoni Castells & Albert Solé-Ollé & Núria Bosch & José Mª Durán-Cabré & Alejandro Esteller-Moré & Maite Vilalta Ferrer, 2017. "The long-awaited reform of the regional financing system / La esperada reforma de la financiación autonómica / L’esperada reforma del finançament autonòmic," IEB Reports ieb_report_1_2017, Institut d'Economia de Barcelona (IEB).
    13. Brice Fabre, 2017. "Political Colleagues Matter: The Impact of Multiple Office-Holding on Intergovernmental Grants," PSE Working Papers halshs-01596149, HAL.
    14. Albert Solé-Ollé, 2013. "Inter-regional redistribution through infrastructure investment: tactical or programmatic?," Public Choice, Springer, vol. 156(1), pages 229-252, July.
    15. Brice Fabre, 2017. "Political Colleagues Matter: The Impact of Multiple Office-Holding on Intergovernmental Grants," Working Papers halshs-01596149, HAL.
    16. Levoshko, Tamila, 2017. ""Pork-Barrel"-Politik und das regionale Wirtschaftswachstum. Empirische Evidenz für die Ukraine und Polen," Working Papers 0642, University of Heidelberg, Department of Economics.
    17. Brice Fabre, 2018. "The Impact of Local Income Inequality on Public Goods and Taxation: Evidence from French Municipalities," Working Papers halshs-01721825, HAL.
    18. Kauder, Björn & Björn, Kauder & Niklas, Potrafke & Markus, Reischmann, 2016. "Do politicians gratify core supporters? Evidence from a discretionary grant program," VfS Annual Conference 2016 (Augsburg): Demographic Change 145509, Verein für Socialpolitik / German Economic Association.
    19. Holl, Adelheid, 2011. "Factors influencing the location of new motorways: large scale motorway building in Spain," Journal of Transport Geography, Elsevier, vol. 19(6), pages 1282-1293.
    20. Kauder, Björn & Potrafke, Niklas & Reischmann, Markus, 2016. "Do politicians reward core supporters? Evidence from a discretionary grant program," European Journal of Political Economy, Elsevier, vol. 45(C), pages 39-56.

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    More about this item

    Keywords

    Infrastructures; Political Economy; Redistribution;
    All these keywords.

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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