Does Electoral Competition Curb Party Favoritism?

Abstract

We study whether incumbents facing uncontested elections channel public spending towards co-partisan officials more than is the case of incumbents that are worried about their chances of re-election. To do so, we draw on data detailing capital transfers allocated by Spanish regions to local governments during the period 1995-2007. Using a regression discontinuity design, we document strong and robust effects. We find that, on average, a mayor belonging to the same party as that of the regional president obtains nearly twice the amount in grants as is received by a mayor belonging to an opposition party. This effect is much greater for regional incumbents that won the previous election by a large margin, but it disappears in the case of highly competitive elections. The effects estimated by difference-in-differences are not so great but they point in the same direction. Overall, the results are consistent with predictions that regional incumbents focus on obtaining the most votes possible when elections are strongly contested, while they seek to increase the number of aligned mayors when their position at the ballot box is not vulnerable. We study whether incumbents facing uncontested elections channel public spending towards co-partisan officials more than is the case of incumbents that are worried about their chances of re-election. To do so, we draw on data detailing capital transfers allocated by Spanish regions to local governments during the period 1995-2007. Using a regression discontinuity design, we document strong and robust effects. We find that, on average, a mayor belonging to the same party as that of the regional president obtains nearly twice the amount in grants as is received by a mayor belonging to an opposition party. This effect is much greater for regional incumbents that won the previous election by a large margin, but it disappears in the case of highly competitive elections. The effects estimated by difference-in-differences are not so great but they point in the same direction. Overall, the results are consistent with predictions that regional incumbents focus on obtaining the most votes possible when elections are strongly contested, while they seek to increase the number of aligned mayors when their position at the ballot box is not vulnerable. JEL Codes: C2, D72

Love is blind: partisan alignment and political corruption in Spain

“…Findings show that aligned municipalities are significantly more associated with corruption than non-aligned ones. The association is stronger where regional governments enjoy an absolute majority, and in municipalities receiving higher capital transfers from regional governments, which is very much in line with previous studies on the allocation of transfers to aligned municipalities in Spain (Solé-Ollé and Sorribas-Navarro 2008;Curto-Grau et al 2018). By contrast, we find that "throwing the rascals out" may be an effective strategy for curbing the corrupt practices of aligned municipalities when allegedly corrupt mayors or parties are actually removed from power.…”

“…We can only speculate on the underlying political mechanisms, but it is rather likely that these are similar to those highlighted in the literature on alignment and transfers. Here, local politicians often benefit from better connections (Curto-Grau et al 2018), which could potentially lead to a lack of monitoring from regional governments. Of course, in this case we are implicitly assuming that regional administrations have, at least in principle, an interest in curbing local level corruption.…”

“…Theoretically, alignment could impact corruption in several different ways: On the one hand, alignment may induce corruption, and several overlapping mechanisms could be at work. First, a variety of studies have already shown that aligned municipalities benefit from more favorable budgetary decisions taken at a higher government level for countries as diverse as Albania (Case 2001), Brazil (Brollo and Nannicini 2012), France (Fabre 2014), India (Arulampalam et al 2009; Dey and Sen 2016), Italy (Bracco et al 2015;Carozzi and Repetto 2016), Portugal (Migueis 2013), Spain (Solé-Ollé andSorribas-Navarro 2008;Curto-Grau et al 2018), and the United States (Levitt and Snyder Jr 1995;Larcinese et al 2006). According to this literature, the possibility of corruption could increase with the number of public programs that are being implemented at the local level, a possibility which is even higher for aligned municipalities.…”

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

“…Empirical studies typically use the vote share of a party as a proxy for the Anderson and Tollison (1991), Ansolabehere et al (2002), Atlas et al (1995), and Knight (2002 and2004) for the United States, and Hodler and Raschky (2014) for developing countries. 3 On the effects of partisan alignment, see Worthington and Dollery (1998) for Australia, Brollo and Nannicini (2012) for Brazil, Cadot et al (2006) for France, Kemmerling and Stephan (2002) for Germany, Arulampalam et al (2009) for India, Bracco et al (2015) for Italy, Veiga and Pinho (2007) for Portugal, Curto-Grau et al (2014), Solé-Ollé (2013), and Solé-Ollé and Sorribas-Navarro (2008) for Spain, and Albouy (2013), Geys and Vermeir (2014), Gist and Hill (1984), Grossman (1994), and Levitt and Snyder (1995) for the United States. 4 On the personality traits of core supporters and swing voters, see Aidt and Rauh (2015).…”

Direct democracy and government size: evidence from Spain

“… 35 For example, Curto-Grau et al (2018) show that regional governments give more transfers to municipalities that are politically aligned.…”