Investing in the roots of your political ancestors

Abstract

Using regional data for Greece, we document the disproportionate allocation of public investment funds in favor of prefectures with many core supporters of the incumbent party. Our main evidence comes from an Instrumental Variables (IV) analysis that exploits the discontinuity in the political landscape of Greece after a brief military junta (1967-1974) to link the parties established after 1974 with their ancestors from the same ‘political family’ during the pre-dictatorial era. In particular, we show that political ancestors’ electoral strength affects the allocation of public investment, the political support between political ancestor and descendant parties is strongly associated and that both push the allocation of public investment in prefectures with many core supporters. We also provide evidence that the appointment of deputy ministers from the loyal prefectures of the incumbent party plays an important role in this relationship. JEL classification: H1; H4; D7

Investing in the roots of your political ancestors

“…We show that: political ancestors' electoral 22 It has been argued that, since 1974, the pre-junta party system, which was based on traditional interpersonal patron-client relationships, was starting to be transformed. In particular, the new parties that emerged during Metapolitefsi were developing stronger organizational structure, mass membership and a new type of clientelistic networks described as bureaucratic clientelism (or machine politics) instead of traditional patronage (see, e.g., Lyrintzis,1984;Mavrogordatos, 1983aMavrogordatos, , 1997Kammas et al, 2021). This transformation of the political system is a stylized fact.…”

“…However, this does not mean that the interpersonal clientelistic relationships of the past disappeared. In contrast, at least during the first years of Metapolitefsi, the newly established political parties were trying to maintain the political networks of their (pre-junta) political ancestors that were structured around powerful MPs and, at the same time, to develop a strong organizational structure (see Kammas et al, 2021, for more details on this).…”