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Tactical distribution in local funding: The value of an aligned mayor

Bernardo Lara E. and Sergio Toro M.
Authors registered in the RePEc Author Service: Bernardo Lara E.

European Journal of Political Economy, 2019, vol. 56, issue C, 74-89

Abstract: Using Chile as a case study for understanding tactical distribution under extensive controls on expenditure, this paper examines whether political motives affect the allocation of funds from the central government to localities. Collecting local-level data of two infrastructure funding programs and using the voting gap percentage between the coalition candidate and opposition competitors in a Sharp Regression Discontinuity methodology, we find causal evidence in favor of three hypotheses: (i) a coalition criterion influences the funding allocation to the local level; (ii) an electoral cycle exists in local funding; and (iii) the degree of coalition targeting varies based on a locality's history of coalition alignment. In sum, the central government regards politically aligned mayors as valuable electoral assets, especially in municipalities historically aligned with the coalition.

Keywords: Tactical distribution; Alignment; Expenditure controls; Fiscal federalism (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:poleco:v:56:y:2019:i:c:p:74-89