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The Political Economy of Portuguese Intergovernmental Grants

Author

Listed:
  • Linda Gonçalves Veiga

    (Universidade do Minho - NIPE)

  • Maria Manuel Pinho

    (Universidade do Porto)

Abstract

We use a large and unexplored dataset covering all mainland Portuguese municipalities from 1979 to 2002 to evaluate the impact of political forces in the allocation of grants from the central government to local authorities. Empirical results clearly show that, besides variables that proxi local population needs and the macroeconomic situation of the country, political variables condition the granting system: (1) grants increase in municipal and legislative election years, (2) the larger the number of years a mayor has been in office, the larger the amount of funds transferred to his/her municipality. These effects are particularly strong for grants that are not formula-determined.

Suggested Citation

  • Linda Gonçalves Veiga & Maria Manuel Pinho, 2005. "The Political Economy of Portuguese Intergovernmental Grants," NIPE Working Papers 8/2005, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:8/2005
    as

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    File URL: http://www3.eeg.uminho.pt/economia/nipe/WP/WP_NIPE_8_05.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    political economy; intergovernmental relations; grants; Portugal.;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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