Electoral effects of intergovernmental fiscal transfers: An application to local elections in the province of Cordoba, 1995-2011

Abstract

We examine the impact of decentralized public policy in the form of intergovernmental fiscal transfers on local election outcomes –the probability of reelection. We assemble a new and unique dataset recording every local executive election in the period 1995-2011 and examine the electoral effect of various types of intergovernmental fiscal transfers. We find that the odds of reelecting local incumbents are increasing in the incumbency dummies for both major parties. Local governments which receive a positive discretionary transfer from the provincial government have also associated higher odds of being reelected. The probability of reelection is also increasing in the difference in the vote share between the winner and the runner-up in the previous election. Finally, we find evidence that the amount of discretionary transfers per capita affect positively the probability of reelection only in those governments aligned with the provincial government. Our results are robust to controlling for other potential explanatory variables.

Keywords

• reelection
• transfers
• fiscal policy
• local governments