Distributive politics and decentralisation in Chile and Peru

Felipe Livert (), Raymundo Mogollón () and Pablo Herrera ()
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Felipe Livert: Department of Applied Economics, University of the Basque Country (UPV/EHU). Department of Political and Social Sciences, European University Institute
Raymundo Mogollón: Department of Economics, Universidad Nacional Agraria La Molina, Lima, Peru
Pablo Herrera: Department of Engineering, Universidad Diego Portales

INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, 2024, issue 58, 91-111

Abstract: The paper presents evidence that decentralisation increases partisan influence in the allocation of non-programmatic resources. The model employs a panel data and fixed effects analysis using data corresponding to intergovernmental transfers from the national level, passing through the regional level and earmarked for investment for local governments in Chile (2008-2018) and Peru (2004 - 2013). The results indicate political influence on the distribution of resources. The distribution of resources is used tactically in both countries in presidential election years. The implementation of laws increasing political decentralisation in Chile and Peru increased the political bias in resource distribution. The results have policy implications and provide a comparative perspective on the development of fiscal institutions in both countries. In a continental scenario, in which Latin American countries are undergoing a strong decentralisation process, it is suggested to advance in reforms that increase transparency, accountability and citizen participation. In addition, it is advisable to limit non-programmatic allocations and provide stability in the distribution of public resources.

Keywords: Distributive politics; decentralisation; Pork barrel; Chile; Peru. (search for similar items in EconPapers)
JEL-codes: O43 O54 P25 P48 (search for similar items in EconPapers)
Date: 2024
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