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Are Presidential Elections Relevant for Local Public Spending? Evidence from Mexico

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  • Raúl Alberto Ponce Rodríguez
  • Benito Alán Ponce Rodríguez

Abstract

Intergovernmental transfers in Mexico represent 84% of income of state and local governments and finance fundamental local public programs in that country. In this paper, we investigate the influence of federal elections and political institutions, such as party affiliation and the control of the national executive over Congress, on the federal budget allocated to state and local governments in Mexico. Our findings reveal that both, election years and the second year of a new national administration, significantly increase federal transfers to subnational governments. Furthermore, presidential elections have a notable impact on state and local budgets, particularly when the ruling parties align with the left or center-left of the political spectrum, resulting in increased resource allocation to subnational governments. Conversely, when a single party controls the national Congress, federal transfers to state and local governments decrease, possibly due to reduced political incentives to support legislators from various regions.

Suggested Citation

  • Raúl Alberto Ponce Rodríguez & Benito Alán Ponce Rodríguez, 2024. "Are Presidential Elections Relevant for Local Public Spending? Evidence from Mexico," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(9), pages 1-14, September.
    • Handle: RePEc:ibn:ijefaa:v:16:y:2024:i:9:p:14
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    References listed on IDEAS

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    3. Anthony B. Atkinson & Joseph E. Stiglitz, 2015. "Lectures on Public Economics Updated edition," Economics Books, Princeton University Press, edition 2, number 10493, December.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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