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Investing in the roots of your political ancestors

Author

Listed:
  • Pantelis Kammas

    (Athens University of Economics and Business)

  • Maria Poulima

    (Department of Economics, University of Ioannina)

  • Vassilis Sarantides

    (Department of Economics, University of Sheffield, UK)

Abstract

Using regional data for Greece over the period 1975-1989, we document the disproportionate allocation of public investment funds in favor of prefectures with many core supporters of the incumbent party. Our main evidence comes from an Instrumental Variables (IV) analysis that exploits the discontinuity in the political landscape of Greece after a brief military junta (1967-1974) to link the parties established after 1974 with their ancestors from the same ‘political family’ during the pre-dictatorial era. In particular, we show that political ancestors’ electoral strength affects the allocation of public investment, the political support between political ancestor and descendant parties is strongly associated and that both push the allocation of public investment in prefectures with many core supporters. We also provide evidence that the appointment of deputy ministers from the loyal prefectures of the incumbent party plays an important role in this relationship.

Suggested Citation

  • Pantelis Kammas & Maria Poulima & Vassilis Sarantides, 2022. "Investing in the roots of your political ancestors," Working Papers 2021004, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2021004
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    File URL: https://www.sheffield.ac.uk/economics/research/serps
    File Function: First version, April 2021
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    More about this item

    Keywords

    public investment; partisan loyalty; open-list proportional representation;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H4 - Public Economics - - Publicly Provided Goods
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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