Do politicians reward core supporters? Evidence from a discretionary grant program

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We investigate whether politicians award intergovernmental grants to core supporters. Our new dataset contains information on discretionary project grants from a German state government to municipalities over the period [2008][2009][2010][2011]. The results show that discretionary grants were awarded to municipalities with many core supporters of the incumbent state government. Discretionary grants per capita increased by about 1.4 percent when the vote share of the incumbent party in the state election increased by one percentage point. The fiscal capacity of a municipality does, by contrast, not predict the level of discretionary grants. We propose to trim discretionary project grants to the benefit of formula-based grants. Terms of use: Documents in EconStor mayJEL-Codes: D720, H720, H770, H810.

To the ones in need or the ones you need? The political economy of central discretionary grants − empirical evidence from Indonesia

“…Significant empirical evidence supports the core voter hypothesis. Kauder et al (2016) show for Germany that core supporters of the incumbent state government receive significantly more discretionary grants. Ansolabehere and Snyder (2006) show that US states favor municipalities in which they received stronger electoral support.…”

“…Third, the literature on political alignment has provided empirical evidence that politically aligned subnational jurisdictions are favored in transfer allocations (Berry et al 2010, Larcinese et al 2006, Bracco et al 2015, Kauder et al 2016, Solé-Ollé and Sorribas-Navarro 2008, Veiga and Pinho 2007, Arulampalam et al 2009, Brollo and Nannicini 2012. We analyze whether political alignment matters in Indonesian politics.…”

“…Two competing hypotheses have been put forward. The core voter hypothesis posits that transfers are made to core supporting districts as they are more likely to respond positively (Cox and McCubbins 1986); it has been supported empirically (Ansolabehere and Snyder 2006;Francken et al 2012, Firpo et al 2015, Kauder et al 2016. In contrast, the swing voter hypothesis argues that transfers go to districts that can be won over easiest (Lindbeck and Weibull 1987); it has also found substantial empirical support (Wright 1974, Garrett and Sobel 2003, Arulampalam et al 2009, Banful 2011, Sorribas-Navarro 2011, Litschig 2012Solé-Ollé 2013, Veiga andVeiga 2013).…”

The urban–rural gap in healthcare infrastructure: does government ideology matter?

“…Third, fiscal transfers and public investment expenditure across jurisdictions have been shown to be influenced by political ideology. In Germany, state governments use discretionary fiscal grants to gratify their core supporters in municipalities (Kauder et al, 2016). Another prominent example of ideology-induced fiscal transfers are grants by US federal governments to individual states or electoral districts (Albouy, 2013;Levitt & Snyder, 1995).…”

“…Figure 1 shows that this pattern hardly changed over time: the vote shares of left-wing parties in state elections was larger in cities than rural regions in the 1970s, 1990s and also 2010s. Politicians are well aware of their traditional strongholds and have been shown to gratify the needs of their core supporters, for example, by granting fiscal transfers (e.g., Albouy, 2013;Kauder, Potrafke, & Reischmann, 2016;Levitt & Snyder, 1995). However, there is still no evidence to show how politicians gratify the needs of their core supporters by providing public goods in urban and rural regions, and the subsequent consequences for spatial inequalities.…”