Intergovernmental grants as signals and the alignment effect: Theory and evidence

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. This paper provides a simple political agency model to explain the effect of political alignment between different tiers of government on intergovernmental grants and election outcomes. Key features of the model are: (i) rational voters interpret public good provision as a signal of incumbent competence, and (ii) realistically, grants are unobservable to voters. In this setting, the national government will use the grant as an instrument to manipulate the public good signal for the benefit of aligned local incumbents and challengers. Then, aligned municipalities receive more grants, with this effect being stronger before elections, and the probability that the aligned local incumbent is re-elected is higher. These predictions are tested using a regression discontinuity design on a new data-set on Italian municipalities. At a second empirical stage, the national grant to municipalities is instrumented with an alignment indicator, allowing estimation of a flypaper effect for Italian municipalities. Terms of use: Documents inJEL-Code: H200, H770, H87, D700.

Fenomena Flypaper Effect Pada Belanja Daerah Kabupaten/Kota Di Indonesia

“…Penelitian ini sejalan dengan Dahlberg et al (2008) yang menunjukkan bahwa transfer dana dari pemerintah pusat terhadap pemerintah daerah di Swedia membuktikan adanya peningkatan positif terhadap belanja daerah dan tidak mengurangi tarif pajak. Bracco et al (2015) juga menunjukkan bahwa pemerintah pusat di Italia menggunakan mekanisme dana transfer untuk memperkokoh hubungan antara pemerintah pusat dan pemerintah daerah. Jika fihak yang berkuasa di daerah dan pusat berasal dari partai yang sama, maka dana transfer dari pemerintah pusat akan meningkat.…”

“…Tujuan utama dari pelaksanaan transfer adalah untuk mengurangi kesenjangan fiskal yang muncul dalam pembangunan antar daerah. Namun, pemberian transfer dihadapkan pada suatu fenomena umum dalam menunjang keberhasilan pembangunan daerah yaitu terjadi peningkatan pengeluaran daerah sejalan dengan meningkatnya dana transfer dari pemerintah, sehingga pemberian transfer tersebut berakibat pada ketidakefektifan dalam pembiayaan pengeluaran daerah dimana respon belanja daerah lebih besar terhadap transfer, maka fenomena tersebut disebut dengan flypaper effects (Hamilton, 1983;Hines dan Thaler, 1995;Melo, 2002 (Vegh dan Vulettin, 2015), China (Liu dan Zhao, 2011), Denmark (Kjaergaard, 2015), Italia (Bracco et al 2015), Jepang (Kakamu et al, 2014), Kanada (Mehiriz dan Marceau, 2014), Slovenia (Pevcin, 2014) dan Swedia (Dahlberg et al, 2008). Bukti empiris tentang flypaper effect juga ditemukan di penelitian lintas negara yang dilakukan oleh Abbott dan Jones (2012) dan Dell'Anno dan Mourou (2012).…”

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).…”

Matching Grants for New and Underutilized Vaccines in Resource-poor Settings: Determinants of Generation of New Money

“…According to theory, a matching grant has greater stimulatory effect on recipients' spending [9,17,18], generation of alternative funding [19] and on expansion of provision of prioritized public goods [20]. However, other researchers have questioned the validity of grant response propositions of conventional theory because of the assumption of grant recipients as individual decision makers [21].…”

“…However, other researchers have questioned the validity of grant response propositions of conventional theory because of the assumption of grant recipients as individual decision makers [21]. In practice, recipients tend to be groups of individuals whose response to grants is influenced by determinants of collective decision making such as administrative requirements, participant institutions in decision making [17,18,21], alignment with recipients' preferences, and political interests [4,20,22,23]. Other grant response determinants include grant structure [18], economic conditions [18,24], and realistic budgets and knowledge of the true cost of target intervention [19].…”