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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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  • Rodriguez-Oreggia, Eduardo & Costa-Font, Joan & Luna Pla, Dario, 2002. "Political competition and the allocation of public investment in Mexico," ERSA conference papers ersa02p260, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa02p260

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    1. 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.
    2. Besley, Timothy & Case, Anne, 1995. "Incumbent Behavior: Vote-Seeking, Tax-Setting, and Yardstick Competition," American Economic Review, American Economic Association, vol. 85(1), pages 25-45, March.
    3. repec:cup:apsrev:v:71:y:1977:i:04:p:1467-1487_26 is not listed on IDEAS
    4. Timothy Besley & Anne Case, 1995. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 769-798.
    5. William D. Nordhaus, 1989. "Alternative Approaches to the Political Business Cycle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(2), pages 1-68.
    6. Alberto Alesina & Guido Tabellini, 1990. "A Positive Theory of Fiscal Deficits and Government Debt," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 403-414.
    7. Petchey, Jeffrey, 2000. "Political Competition and Voter Mobility," Public Choice, Springer, vol. 105(3-4), pages 231-243, December.
    8. 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.
    9. Peter Coughlin, 1986. "Elections and income redistribution," Public Choice, Springer, vol. 50(1), pages 27-91, January.
    10. 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.
    11. Migue, Jean-Luc, 1997. "Public Choice in a Federal System," Public Choice, Springer, vol. 90(1-4), pages 235-254, March.
    12. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
    13. 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 473-491, June.
    14. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
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