IDEAS home Printed from https://ideas.repec.org/p/ays/ispwps/paper1230.html
   My bibliography  Save this paper

On the Political Determinants of Intergovernmental Grants in Decentralized Countries: The Case of Spain

Author

Listed:

Abstract

This paper studies the effect of political variables on the gains obtained by Spanish regions in periodical bargaining of the intergovernmental financing agreements and on the regional distribution of discretional earmarked grants over the period 1987-2008. First, we find that the relationship between gains in transferred revenues and on regional public debt stocks depends on the period and the specific issues discussed in the corresponding negotiation, aside from political affinity. Second, we show that the most discretional program of earmarked grants is strongly driven by electoral strategy. National incumbents tend to allocate intergovernmental transfers where there are competitive regional elections. Moreover, we show that earmarked grants are allocated in those regions where the incumbent performs better in national elections and, especially, in those where there are more seats to be won. Hence we prove that both strategies are complementary rather than exclusive.

Suggested Citation

  • Pablo Simón-Cosano & Santiago Lago-Peñas & Alberto Vaquero, 2012. "On the Political Determinants of Intergovernmental Grants in Decentralized Countries: The Case of Spain," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1230, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper1230
    as

    Download full text from publisher

    File URL: http://icepp.gsu.edu/files/2015/03/ispwp1230.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hans Pitlik & Friedrich Schneider & Harald Strotmann, 2006. "Legislative Malapportionment and the Politicization of Germany's Intergovernmental Transfer System," Public Finance Review, , vol. 34(6), pages 637-662, November.
    2. Alberto Porto & Pablo Sanguinetti, 2001. "Political Determinants of Intergovernmental Grants: Evidence From Argentina," Economics and Politics, Wiley Blackwell, vol. 13(3), pages 237-256, November.
    3. Iversen, Torben & Soskice, David, 2006. "Electoral Institutions and the Politics of Coalitions: Why Some Democracies Redistribute More Than Others," American Political Science Review, Cambridge University Press, vol. 100(2), pages 165-181, May.
    4. Dahlberg, Matz & Johansson, Eva, 2002. "On the Vote-Purchasing Behavior of Incumbent Governments," American Political Science Review, Cambridge University Press, vol. 96(1), pages 27-40, March.
    5. Gary Hoover & Paul Pecorino, 2005. "The Political Determinants of Federal Expenditure at the State Level," Public Choice, Springer, vol. 123(1), pages 95-113, April.
    6. Samuels, David & Snyder, Richard, 2001. "The Value of a Vote: Malapportionment in Comparative Perspective," British Journal of Political Science, Cambridge University Press, vol. 31(4), pages 651-671, October.
    7. Stuti Khemani, 2007. "The Political Economy of Equalization Transfers," Springer Books, in: Jorge Martinez-Vazquez & Bob Searle (ed.), Fiscal Equalization, chapter 0, pages 463-484, Springer.
    8. Khemani, Stuti, 2003. "Partisan politics and intergovernmental transfers in India," Policy Research Working Paper Series 3016, The World Bank.
    9. Santiago Lago-Penas, 2006. "Capital grants and regional public investment in Spain: fungibility of aid or crowding-in effect?," Applied Economics, Taylor & Francis Journals, vol. 38(15), pages 1737-1747.
    10. Brambor, Thomas & Clark, William Roberts & Golder, Matt, 2006. "Understanding Interaction Models: Improving Empirical Analyses," Political Analysis, Cambridge University Press, vol. 14(1), pages 63-82, January.
    11. Jorge Martinez-Vazquez & Bob Searle, 2007. "Challenges in the Design of Fiscal Equalization and Intergovernmental Transfers," Springer Books, in: Jorge Martinez-Vazquez & Bob Searle (ed.), Fiscal Equalization, chapter 0, pages 3-10, Springer.
    12. Johansson, Eva, 2003. "Intergovernmental grants as a tactical instrument: empirical evidence from Swedish municipalities," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 883-915, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mar Delgado-Téllez & Javier J. Pérez, 2020. "Institutional and Economic Determinants of Regional Public Debt in Spain," Public Finance Review, , vol. 48(2), pages 212-249, March.
    2. Silvia Fresneda & Nuria Reguera & Fernando Casas, 2021. "De-agentification Process in Spanish Regional Governments," Hacienda Pública Española / Review of Public Economics, IEF, vol. 236(1), pages 39-64, March.
    3. Daniel Aparicio-Pérez & Maria Teresa Balaguer-Coll & Emili Tortosa-Ausina, 2021. "Politics against Economics: The Case of Spanish Regional Financing," Working Papers 2021/15, Economics Department, Universitat Jaume I, Castellón (Spain).
    4. Andrés Rodríguez-Pose & Yannis Psycharis & Vassilis Tselios, 2016. "Politics and Investment: Examining the Territorial Allocation of Public Investment in Greece," Regional Studies, Taylor & Francis Journals, vol. 50(7), pages 1097-1112, July.
    5. Santiago Lago-Peñas & Agnese Sacchi & Pablo Simon-Cosano, 2014. "Who honor the rules of federalism? Party system nationalization and fiscal performance," Working Papers. Collection A: Public economics, governance and decentralization 1409, Universidade de Vigo, GEN - Governance and Economics research Network.
    6. Javier J. Pérez & Rocío Prieto, 2015. "Risk Factors and the Maturity of Subnational Debt," Public Finance Review, , vol. 43(6), pages 786-815, November.
    7. Salvador Barrios & Diego Martínez-López, 2017. "Fiscal equalization schemes and subcentral government borrowing," Chapters, in: Naoyuki Yoshino & Peter J. Morgan (ed.), Central and Local Government Relations in Asia, chapter 4, pages 130-160, Edward Elgar Publishing.
    8. Maria del Mar Delgado & Pablo Hernandez de Cos & Javier J. Pérez, 2017. "Institutional and economic determinants of Sub-national public debt in Spain," EcoMod2017 10518, EcoMod.
    9. Kayode Taiwo & Linda G. Veiga, 2020. "Is there an “invisible hand” in the formula-based intergovernmental transfers in Nigeria?," NIPE Working Papers 02/2020, NIPE - Universidade do Minho.
    10. Eduardo Bandrés & Alain Cuenca, 2016. "Las reformas de la financiación autonómica: elementos para una aproximación desde la economía política," Revista de Estudios Regionales, Universidades Públicas de Andalucía, vol. 1, pages 165-194.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Manuel E. Lago & Santiago Lago-Peñas & Jorge Martinez-Vazquez, 2024. "On the effects of intergovernmental grants: a survey," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(3), pages 856-908, June.
    2. Leonardo A. Gatica Arreola, 2012. "¿Por qué el distanciamiento ideológico disminuye la provisión de bienes públicos?; una explicación basada en el empleo clientelar," Estudios de Economia, University of Chile, Department of Economics, vol. 39(1 Year 20), pages 27-51, June.
    3. Solé-Ollé, Albert & Sorribas-Navarro, Pilar, 2008. "The effects of partisan alignment on the allocation of intergovernmental transfers. Differences-in-differences estimates for Spain," Journal of Public Economics, Elsevier, vol. 92(12), pages 2302-2319, December.
    4. Maria EL KHDARI, 2015. "Déterminants des transferts intergouvernementaux : le cas des communes Marocaines," Working Papers 201531, CERDI.
    5. Kayode Taiwo & Linda G. Veiga, 2020. "Is there an “invisible hand” in the formula-based intergovernmental transfers in Nigeria?," NIPE Working Papers 02/2020, NIPE - Universidade do Minho.
    6. Josip Glaurdić & Vuk Vuković, 2017. "Granting votes: exposing the political bias of intergovernmental grants using the within-between specification for panel data," Public Choice, Springer, vol. 171(1), pages 223-241, April.
    7. Rongili Biswas & Sugata Marjit & Velayoudom Marimoutou, 2010. "Fiscal Federalism, State Lobbying And Discretionary Finance: Evidence From India," Economics and Politics, Wiley Blackwell, vol. 22(1), pages 68-91, March.
    8. Emilie Caldeira, 2012. "Does the System of Allocation of Intergovernmental Transfers in Senegal Eliminate Politically Motivated Targeting?," Journal of African Economies, Centre for the Study of African Economies, vol. 21(2), pages 167-191, March.
    9. Reingewertz, Yaniv, 2014. "Fiscal Decentralization - a Survey of the Empirical Literature," MPRA Paper 59889, University Library of Munich, Germany.
    10. Sorribas-Navarro, Pilar, 2011. "Bailouts in a fiscal federal system: Evidence from Spain," European Journal of Political Economy, Elsevier, vol. 27(1), pages 154-170, March.
    11. Levoshko, Tamila, 2017. ""Pork-Barrel"-Politik und das regionale Wirtschaftswachstum. Empirische Evidenz für die Ukraine und Polen," Working Papers 0642, University of Heidelberg, Department of Economics.
    12. Sengupta, Bodhisattva, 2011. "Provision of public goods in a federal economy: The role of party politics," European Journal of Political Economy, Elsevier, vol. 27(1), pages 104-119, March.
    13. William Hankins & Gary Hoover & Paul Pecorino, 2017. "Party polarization, political alignment, and federal grant spending at the state level," Economics of Governance, Springer, vol. 18(4), pages 351-389, November.
    14. Guccio, Calogero & Mazza, Isidoro, 2014. "On the political determinants of the allocation of funds to heritage authorities," European Journal of Political Economy, Elsevier, vol. 34(C), pages 18-38.
    15. Khemani, Stuti, 2007. "Does delegation of fiscal policy to an independent agency make a difference? Evidence from intergovernmental transfers in India," Journal of Development Economics, Elsevier, vol. 82(2), pages 464-484, March.
    16. Sebastian Galiani & Iván Torre & Gustavo Torrens, 2016. "Fiscal Federalism and Legislative Malapportionment: Causal Evidence from Independent but Related Natural Experiments," Economics and Politics, Wiley Blackwell, vol. 28(1), pages 133-159, March.
    17. Tiberiu Dragu & Jonathan Rodden, 2010. "Representation and regional redistribution in federations," Working Papers 2010/16, Institut d'Economia de Barcelona (IEB).
    18. Pilar Sorribas-Navarro, 2006. "(When) Are Intergovernmental Transfers Used to Bail Out Regional Governments? Evidence from Spain 1986-2001," Working Papers 2006/7, Institut d'Economia de Barcelona (IEB).
    19. Liang, Che-Yuan, 2008. "Collective Lobbying in Politics: Theory and Empirical Evidence from Sweden," Working Paper Series 2008:2, Uppsala University, Department of Economics.
    20. Maria El Khdari, 2019. "Déterminants des transferts intergouvernementaux : le cas du Maroc," Post-Print hal-02137651, HAL.

    More about this item

    Keywords

    Intergovernmental grants; party systems; elections; subcentral public debt.;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ays:ispwps:paper1230. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paul Benson (email available below). General contact details of provider: https://edirc.repec.org/data/ispgsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.