Core Voters or Local Allies? Presidential Discretionary Spending in Centralized and Decentralized Systems in Latin America

Abstract

Starting in the late 1990s, traditional opposition parties in Latin America started to capture presidencies. Some of these parties have dramatically shifted resources to core voters as promised, while others have been slower to realize their campaign agendas. I argue this difference depends on presidents' incentives which differ between centralized and decentralized systems. All presidents want their parties to be re-elected, but when local officials are powerful and often opposed to the president, presidents worry that local rivals will steal credit for the provision of goods. This mechanism deters presidents from targeting their voters directly. Instead, presidents in decentralized systems compensate by delivering more goods where local officials are co-partisans, even if the plurality of voters did not support the president there. Resource allocation should thus depend on partisan control of local office in decentralized systems. In centralized systems it should depend on voters' support for the president, even if the local mayor opposed the president. I demonstrate this pattern across 12 years and 100,000 municipalities in Argentina, Brazil, Mexico, and Venezuela. My analysis draws on observational data, as well as on in-depth interviews with current or former presidents, governors, and several mayors.