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Investing in the roots of your political ancestors

Author

Listed:
  • Pantelis Kammas

    (Athens University of Economics and Business)

  • Maria Poulima

    (University of Ioannina)

  • Vassilis Sarantides

    (Athens University of Economics and Business)

Abstract

We use regional data for Greece between 1975–1989 to demonstrate a disproportionate allocation of public investment funds to prefectures that exhibited stronger support for the incumbent party. Our main empirical evidence comes from an Instrumental Variables (IV) analysis that exploits the discontinuity in Greece's political landscape 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 the electoral strength of political ancestors influences the allocation of public investment. Moreover, there is a strong association between the political support of ancestor and descendant parties, both of which influence the allocation of public investment in prefectures with many core supporters. We also present evidence indicating that the appointment of deputy ministers from loyal prefectures of the incumbent party plays a significant mediating role in the allocation of public investment to prefectures with a strong base of core supporters.

Suggested Citation

  • Pantelis Kammas & Maria Poulima & Vassilis Sarantides, 2025. "Investing in the roots of your political ancestors," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 32(2), pages 595-624, April.
    • Handle: RePEc:kap:itaxpf:v:32:y:2025:i:2:d:10.1007_s10797-024-09840-1
    DOI: 10.1007/s10797-024-09840-1
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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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