Political incentives and state subsidy allocation: Evidence from Hungarian municipalities

Abstract

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Success or Waste of Taxpayer Money? Impact Assessment of Rural Development Programs in Hungary

“…As [4] pointed out, if payments are not based on clear criteria, they may leave room for "political bargaining and side payments", thus sacrificing economic effectiveness for political goals-a situation that may certainly apply to the Hungarian case. [59] employed a comprehensive database of both accepted and rejected EU Structural and Cohesion Fund applications in Hungary. Covering almost the entire period we also investigated (2005-2012), they analyzed the types of grants susceptible to political favoritism.…”

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