Abstract
In this article, the objective is to focus on the likelihood that politicians will rely on intergovernmental transfers to pursue political ambition. In what circumstances are incumbents more likely to rely on transfers to win votes, than to reward core supporters? How are constraints (introduced to ensure that politicians rely on predetermined formulae which reduce the incentive to design transfers to win re‐election) likely to influence “distributive politics?” Predictions in this article are tested with reference to intergovernmental transfers to 31 Mexican states between 2004 and 2012.
Highlights
A theoretical literature focused on fiscal federalism argues that intergovernmental transfers can be designed to increase efficiency and to redistribute resources equitably (Oates, 1999) but, in practice, critics argue that intergovernmental transfers are more likely to be designed to pursue political ambition (Ferejohn, 1974; Rogoff and Siebert, 1988; Rogoff, 1990)
The first conclusion in this paper is that the results in this paper are consistent with the prediction that incumbents in Mexico have designed intergovernmental transfers to win votes
After allowing for the impact of other determinants of intergovernmental transfers, the results indicate that transfers increased in election years and that transfers favoured voters in ‘swing states’
Summary
A theoretical literature focused on fiscal federalism argues that intergovernmental transfers can be designed to increase efficiency and to redistribute resources equitably (Oates, 1999) but, in practice, critics argue that intergovernmental transfers are more likely to be designed to pursue political ambition (Ferejohn, 1974; Rogoff and Siebert, 1988; Rogoff, 1990). The first objective is to question whether politicians in Mexico have designed intergovernmental transfers to win votes. (i) In Mexico, politicians in the Chamber of Deputies are likely to have designed intergovernmental transfers to win votes. < TABLE 1 NEAR HERE > The Chamber has exercised discretion by approving transfers that differ from proposals based on pre-determined formulae (rather than by changing pre-determine formulae) With this awareness of the Chamber’s discretion, a recent study of fiscal federal relations in Mexico refers to the ‘ease’ with which states “...lobby for higher federal transfers” (Caldera Sánchez 2013:17). Attention will focus on transfers from the federal government to the Mexican states in the knowledge that transfers approved by the Chamber of Deputies have differed from proposals based on pre-determined formulae. Have politicians focused systematically on the timing of elections and on the importance of winning ‘swing states’?
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