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Voters as a Hard Budget Constraint: On the Determination of Intergovernmental Grants

Lars Feld and Christoph Schaltegger

CREMA Working Paper Series from Center for Research in Economics, Management and the Arts (CREMA)

Abstract: Recent empirical literature has shown that the determination of intergovernmental grants is highly influenced by the political bargaining power of the recipient states. In these models federal politicians are assumed to buy the support of state voters, state politicians and state interest groups by providing grants. In this paper we provide evidence that the fiscal referen-dum reduces the reliance of states on matching grants received from the central government and thus the possibility of state interest groups and state bureaucrats to obtain more grants. If referendums are available, voters serve as a hard budget constraint.

Keywords: Budget Referendums; Intergovernmental Grants; Interest Group Influence (search for similar items in EconPapers)
JEL-codes: D7 D72 H77 (search for similar items in EconPapers)
Date: 2005-06
New Economics Papers: this item is included in nep-cdm, nep-pbe, nep-pol and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Journal Article: Voters AS A Hard Budget Constraint: On the Determination of Intergovernmental Grants (2005) Downloads
Working Paper: Voters as a hard budget constraint: On the determination of intergovernmental grants (2004) Downloads
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