Fiscal Origins of Subnational Democracy: Evidence from Argentina

Diego Diaz-Rioseco and Carla Alberti
Additional contact information
Diego Diaz-Rioseco: Escuela de Gobierno, Pontificia Universidad Católica de Chile
Carla Alberti: Instituto de Ciencia Política, Pontificia Universidad Católica de Chile

Politics & Society, 2024, vol. 52, issue 1, 68-99

Abstract: Subnational governments are generally funded by fiscal rents, that is, transfers of centrally levied taxes. Existing literature concurs that fiscal federalism breeds rentierism and, consequently, hinders subnational democracy. However, in Argentina, fiscal rents do not always lead to low provincial contestation. Building on research on oil-based rentierism and fiscal federalism, we argue that this variation results from the provincial fiscal institutions that distribute central-government transfers from the province to municipalities. Specifically, we claim that as provincial fiscal institutions decentralize fiscal rents from the province to municipalities, they empower mayors to challenge governors. Conversely, as these institutions centralize rents at the province, they empower governors and weaken opposition from below. Using panel data and a comparison between Tierra del Fuego and Santa Cruz—the provinces that receive the largest fiscal transfers—we show that the effect of fiscal rents on incumbent party advantage decreases and eventually disappears as institutions become province-decentralizing.

Keywords: subnational democracy; fiscal federalism; rentierism; decentralization; municipalities (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/00323292221137192 (text/html)

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:sae:polsoc:v:52:y:2024:i:1:p:68-99

DOI: 10.1177/00323292221137192

Access Statistics for this article

More articles in Politics & Society
Bibliographic data for series maintained by SAGE Publications ().