Federal budget allocation in an emergent democracy: evidence from Argentina

Abstract

This paper studies the determinants of the distribution of the national budget amongst Argentinean provinces. We evaluate the relevance of the alternative theories of budget allocation using the Arellano–Bond dynamic panel technique. Our results confirm our presumption that Federal funds allocations are dominated by the Executive and the governors while the Congress plays a minor role. Unlike some findings for the US, neither the overrepresentation variables nor the congressional theories find support in our sample. Our paper fills the gap in the literature on Argentina’s fiscal federalism deficient in analysis of the decision making process of the National Budget.