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Political competition and the allocation of public investment in Mexico

  • Rodriguez-Oreggia, Eduardo

    ()

  • Costa-Font, Joan

    ()

  • Luna Pla, Dario

This paper examines the causality between central government spending in regions and local elections, in an environment of increasing electoral competition and a undefined decentralisation. This study examines Mexican elections during the period 1990-1995 where the main party started loosing part of its influence and there were many claims of use of the budget to favour the central governing party. We employ data on public investment and municipalities ruled by the PRI in each Mexican region. The evidence shows that there is opportunistic behaviour of the central government using public investment to gain local control of pressures for decentralisation.

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File URL: http://www-sre.wu-wien.ac.at/ersa/ersaconfs/ersa02/cd-rom/papers/260.pdf
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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa02p260.

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Date of creation: Aug 2002
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Handle: RePEc:wiw:wiwrsa:ersa02p260
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  1. Timothy Besley & Anne Case, 1992. "Incumbent Behavior: Vote Seeking, Tax Setting and Yardstick Competition," NBER Working Papers 4041, National Bureau of Economic Research, Inc.
  2. William D. Nordhaus, 1989. "Alternative Approaches to the Political Business Cycle," Cowles Foundation Discussion Papers 927, Cowles Foundation for Research in Economics, Yale University.
  3. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
  4. Wallace E. Oates, 1968. "The Theory of Public Finance in a Federal System," Canadian Journal of Economics, Canadian Economics Association, vol. 1(1), pages 37-54, February.
  5. Alesina, Alberto & Tabellini, Guido, 1990. "A Positive Theory of Fiscal Deficits and Government Debt," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 403-14, July.
  6. Alberto Alesina & Gerald D. Cohen & Nouriel Roubini, 1991. "Macroeconomic Policy and Elections in OECD Democracies," NBER Working Papers 3830, National Bureau of Economic Research, Inc.
  7. Nordhaus, William D, 1975. "The Political Business Cycle," Review of Economic Studies, Wiley Blackwell, vol. 42(2), pages 169-90, April.
  8. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
  9. Migue, Jean-Luc, 1997. " Public Choice in a Federal System," Public Choice, Springer, vol. 90(1-4), pages 235-54, March.
  10. Petchey, Jeffrey, 2000. " Political Competition and Voter Mobility," Public Choice, Springer, vol. 105(3-4), pages 231-43, December.
  11. Rogers, Diane Lim & Rogers, John H, 2000. " Political Competition and State Government Size: Do Tighter Elections Produce Looser Budgets?," Public Choice, Springer, vol. 105(1-2), pages 1-21, October.
  12. Timothy Besley & Anne Case, 1993. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," NBER Working Papers 4575, National Bureau of Economic Research, Inc.
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