Formula-based Grants as Pork Barrel Politics: Targetability and the Political-strategic Use of Grants

Søren Frank Etzerodt () and Niels Jørgen Mau Pedersen ()
Additional contact information
Søren Frank Etzerodt: TUM School of Social Sciences & Technology
Niels Jørgen Mau Pedersen: Danish Center for Social Science Research

Munich Papers in Political Economy from Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich

Abstract: A large literature in political science asserts that formula-based grants are immune to political whims and pork barrel politics. In contrast, we argue that formula-based grants can be leveraged politically as central policymakers have the power to influence the design of the formula allowing grants to be targeted to specific geographically defined constituencies. Using the Danish large-scale 2020 municipal equalization and grants reform as a case, we test our argument. We find that several new formula-based grants have a relatively high degree of political targetability while at the same time having a large impact on redistribution. These grants correlate with constituencies where the incumbent and its supporters are strongly represented before the reform. The new grants also impact voting in the election following the reform suggesting that formula-based grants may also pay off electorally. We find no robust statistically significant relationship for formula-based grants based on low targetability.

Keywords: pork barrel politics; distributive politics; grants; formula-based grants; targetability; mixed methods (search for similar items in EconPapers)
JEL-codes: H40 P16 P30 P35 (search for similar items in EconPapers)
Pages: 79 pages
Date: 2024-02
New Economics Papers: this item is included in nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cms.mgt.tum.de/fileadmin/mgt.tum.de/facult ... rodt_MauPedersen.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aiw:wpaper:34

Access Statistics for this paper

More papers in Munich Papers in Political Economy from Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich Contact information at EDIRC.
Bibliographic data for series maintained by MPPE ().