Economic Policy and Electoral Self Interest: The Allocations of the Department of Regional Economic Expansion

Abstract

This paper examines the relative importance of political and economic factors in the spatial distribution of industrial location subsidies offered by the Department of Regional Economic Expansion in federal electoral districts between 1969 and 1974. The conventional view would appear to be that allocative decisions are influenced by technical factors, by economic goals, or occasionally by broadly political objectives such as fostering national integration, but not by the electoral self-interest of the governing party. An alternative view, which is explored here, is that partisan electoral considerations may enter into the decision-making process in a number of ways, depending upon the government's electoral strategy. Using mutiple regression analysis it was found that after controlling for economic need, per capita expenditures on regional development incentives were associated positively with the degree of electoral volatility in an electoral district and with the presence of an incumbent Social Credit MP.