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On the Political Determinants of Intergovernmental Grants in Decentralized Countries: The Case of Spain

 

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Opened Access On the Political Determinants of Intergovernmental Grants in Decentralized Countries: The Case of Spain
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Author: Simón Cosano, Pablo
Lago Peñas, Santiago
Vaquero García, Alberto
Date: 2013
Published in: XX Encuentro de Economía Pública, 2013, SevillaEstado del bienestar: sostenibilidad y reformas
ISBN/ISSN: 978-84-695-6945-0
Document type: Presentation
Abstract: This paper studies the effect of political variables on the gains obtained by Spanish regions in periodical bargaining of the intergovernmental financing agreements and on the regional distribution of discretional earmarked grants over the period 1987-2008. First, we find that the relationship between gains in transferred revenues and on regional public debt stocks depends on the period and the specific issues discussed in the corresponding negotiation, aside from political affinity. Second, we show that the most discretional program of earmarked grants is strongly driven by electoral strategy. National incumbents tend to allocate intergovernmental transfers where there are competitive regional elections. We also show that earmarked grants are allocated in those regions where the incumbent performs better in national elections and, especially, in those where there are more seats to be won. Hence we prove that both strategies are complementary rather than exclusive.
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URI: http://hdl.handle.net/11441/30605

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