Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26380
Authors: 
Solé-Ollé, Albert
Sorribas-Navarro, Pilar
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2335
Abstract: 
In this paper we test the hypothesis that intergovernmental grants allocated to co-partisans buy more political support than grants allocated to local governments controlled by opposition parties. We use a rich Spanish database containing information about the grants received by 617 municipalities during the period 1993-2003 from two different upper-tier governments (Regional and Upper-local), as well as data of municipal voting behaviour at three electoral contests held at the different layers of government during this period. Therefore, we are able to estimate two different vote equations, analysing the effects of grants given to aligned and unaligned municipalities on the vote share of the incumbent party/parties at the regional and local elections. We account for the endogeneity of grants by instrumenting them with the average amount of grants distributed by upper-layer governments. The results suggest that grants given to co-partisans buy some political support, but that grants given to opposition parties do not bring any votes, suggesting that the grantee reaps as much political credit from intergovernmental grants as the grantor.
Subjects: 
Voting
parties
grants
JEL: 
D72
H73
Document Type: 
Working Paper

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