Political competition and pork-barrel politics in the allocation of public investment in Mexico

Abstract

This paper examines the effect of political competition in local elections in re- gional allocation of public investment. The study employs data on Mexican elections covering the period 1990-95, characterised by an increase in electoral competition and coupled with increasing demands for decentralisation throughout the states. Empirical evidence supports the hypothesis that regional allocation of public investment by central government was driven by 'political opportunism' and 'local pork-barrel politics'. A positive relationship was found between the regional allocation of public investment and support for the central ruling party. This might indicate that local spending inefficiencies were partially explained by the specific support for the incumbent party.