Abstract
This paper presents evidence of the influence of political competition on the behavior of fiscal policy in Argentine provinces from 1987 to 2015. Contrary to the predominant theory and empirical evidence from subnational districts my estimations of a dynamic panel data show that political competition is associated with increases in public outlays and changes in its composition. This finding is strongly related to the large vertical fiscal imbalances that characterize the Argentine fiscal federalism. I conjecture that governors use the additional low-cost spending power given by federal transfers to feed clientelistic networks, increase public employment and direct subsidies to constituencies, thus enhancing their chances to remain in office.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
