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How the Cake is Distributed: The Case of Portuguese Decentralized Grants

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  • Paulo Reis Mourão

    (Department of Economics, Economics and Management School, University of Minho, 4700 Braga, Portugal)

Abstract

This paper will discuss how the distribution of decentralized grants for Portuguese municipalities affects the evolution of the total amounts given by the Portuguese government to Portuguese municipalities. After a review of the literature I discuss a model based on a Bergson–Samuelson function. I used official data (from Portuguese Budget Reports) since 1982 for studying the decentralized grants. I also regress on other Portuguese time series in order to control for the effect of inequality series. Applying cointegration techniques and testing the causality direction, I conclude that there is a statistical validation that, as the distribution becomes more unequal, the total amounts of the transferred grants decrease.

Suggested Citation

  • Paulo Reis Mourão, 2012. "How the Cake is Distributed: The Case of Portuguese Decentralized Grants," Environment and Planning A, , vol. 44(2), pages 477-490, February.
    • Handle: RePEc:sae:envira:v:44:y:2012:i:2:p:477-490
    DOI: 10.1068/a44197
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    References listed on IDEAS

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    1. Qiao, Baoyun & Martinez-Vazquez, Jorge & Xu, Yongsheng, 2008. "The tradeoff between growth and equity in decentralization policy: China's experience," Journal of Development Economics, Elsevier, vol. 86(1), pages 112-128, April.
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    4. Stephen Knowles, 2005. "Inequality and Economic Growth: The Empirical Relationship Reconsidered in the Light of Comparable Data," Journal of Development Studies, Taylor & Francis Journals, vol. 41(1), pages 135-159.
    5. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-664, August.
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