Voters as a hard budget constraint: On the determination of intergovernmental grants

Lars Feld and Christoph Schaltegger

No 200418, Marburg Working Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

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 referendum 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)
Pages: 25 pages
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Forthcoming in Public Choice 2005

Downloads: (external link)
http://www.uni-marburg.de/fb02/makro/forschung/gel ... haltegger_gesamt.pdf First version, 2004 (application/pdf)

Related works:
Journal Article: Voters AS A Hard Budget Constraint: On the Determination of Intergovernmental Grants (2005)
Working Paper: Voters as a Hard Budget Constraint: On the Determination of Intergovernmental Grants (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:volksw:200418

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