Party Leader or Party Reputation Concerns? How Vertical Partisan Alignment Reins in Subnational Fiscal Profligacy

Abstract

Some scholars argue that party leader considerations drive governors copartisan with presidents toward fiscal discipline, while others argue that party reputation concerns guide their behavior. To demonstrate how to assess whether either of these mechanisms is at work, I extend this analysis to the municipal level. If mayors aligned with both governors and presidents are more disciplined than mayors aligned with presidents only, copartisan governors affect mayoral fiscal behavior through party leader considerations. If mayors aligned with both governors and presidents are just as fiscally disciplined as those aligned with presidents only, party reputation concerns drive mayoral fiscal behavior. Cross-sectional time-series analysis of debt used to finance fiscal excess in municipal Mexico reveals support for the party-leader-concern logic in this nation, but the party reputation logic (or both logics or neither logic) may be at work in others.

Partisan alignment and political corruption: Evidence from a new democracy

“…Based on political competition that incentivizes politicians of differing partisan background to monitor and expose each other, his theoretical model predicts that corruption will be higher in aligned municipalities, where this control mechanism is not present. However, Benton (2019) expands upon a different set of theoretical mechanisms involving vertical partisan alignment and the observed improvement of fiscal discipline with aligned municipalities (Jones, Sanguinetti and Tommasi 2000;Rodden and Wibbels 2002). In her study, local politicians are also motivated by career concerns, but these set off a very different mechanism than in the model described above.…”

“…These party leaders are concerned with re-election and thus try to avoid activities that would jeopardize their re-election. In the case of Benton (2019) politicians try to maintain macroeconomic stability and fiscal discipline to signal voters their competence to warrant re-election. Subsequently, Benton's model is based on political ambition theory, where politicians act within vertically organized parties and try to build their political careers by rising through the ranks of the party hierarchy.…”

“…Additional studies have linked partisan alignment to fiscal discipline, indicating that municipalities are fiscally more disciplined when they are politically aligned with the central government (Jones, Sanguinetti and Tommasi 2000;Rodden and Wibbels 2002;Benton and Smith 2013;Benton 2019). The latter papers identify two interlinked mechanisms.…”

Análisis del presupuesto aprobado y del gasto ejercido, 2001-2017. El caso del Ramo 33

“…Igualmente, se puede mencionar la propuesta analítica de Benton (2019), que retoma las ideas anteriores y establece que los mecanismos de cooperación detrás de una alineación partidista vertical son el liderazgo partidista y la reputación del partido. El primer mecanismo existe cuando el líder partidista controla el acceso a las oportunidades políticas dentro de sus esferas territoriales de autoridad.…”

“…Un desempeño económico óptimo fortalece la reputación y el apoyo electoral del gobierno nacional y aumenta las oportunidades políticas disponibles para los copartidarios subnacionales. En contraste, un pobre desempeño macroeconómico debilita la reputación y el apoyo electoral del gobierno nacional, lo cual reduce las oportunidades políticas disponibles para los copartidarios subnacionales (Benton, 2019).…”