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Elections and de facto expenditure decentralization in Canada

Author

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  • Mario Jametti

    () (Università della Svizzera italiana, CESifo)

  • Marcelin Joanis

    () (Polytechnique Montréal)

Abstract

This paper empirically investigates the underlying determinants of the respective roles of different levels of government in expenditure functions, guided by recent theoretical developments on the political economy of partial expenditure decentralization. We adopt a theoretical framework in which the degree of expenditure decentralization is endogenous and depends, in equilibrium, on the relative political conditions prevailing at each level of government. Consistent with the model’s predictions, empirical results from a panel of Canadian provinces show that the share of total expenditure in a province assumed by the provincial government increases with the electoral strength of the provincial government and decreases with the electoral strength of the federal government, in addition to being affected significantly by the partisan affiliation of both levels of government. A series of alternative empirical specifications, including an IV regression exploiting campaign spending data, are presented to assess the robustness of these results.

Suggested Citation

  • Mario Jametti & Marcelin Joanis, 2020. "Elections and de facto expenditure decentralization in Canada," Economics of Governance, Springer, vol. 21(3), pages 275-297, September.
  • Handle: RePEc:spr:ecogov:v:21:y:2020:i:3:d:10.1007_s10101-020-00241-8
    DOI: 10.1007/s10101-020-00241-8
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    Cited by:

    1. Robin Boadway & Katherine Cuff, 2017. "The impressive contribution of Canadian economists to fiscal federalism theory and policy," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1348-1380, December.
    2. Sergio Galletta, 2020. "Direct democracy, partial decentralization and voter information: evidence from Swiss municipalities," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(5), pages 1174-1197, October.

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    More about this item

    Keywords

    Fiscal decentralization; Fiscal federalism; Partial decentralization; Elections;
    All these keywords.

    JEL classification:

    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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