This paper studies whether higher level governments treat politically aligned municipalities differently than unaligned ones when they provide special discretionary transfers to resolve acute fiscal problems (special needs transfers). By implementing a regression discontinuity design with a...

More than two years after the official end of the Great Recession, state governments still face significant budget deficits that cannot be addressed without further drastic spending cuts or substantial revenue increases. The structural origins of the ongoing state fiscal crisis are well known....

We explore how the presence of direct democracy across hierarchical levels of government in a federation affects the level of public expenditure. In so doing we revisit the effect of direct democratic institutions on public policies. Particularly, we are interested whether the effect of...

An extensive literature analyses the impact of upper-tier transfers on the spending behaviour of lower level governments. According to the median voter framework, a transfer from the centre should act as a lump sum grant to residents and thus be spent by jurisdictions in the same proportion as...

We investigate whether politicians award intergovernmental grants to core supporters. Our new dataset contains information on discretionary project grants from a German state government to municipalities over the period 2008-2011. The results show that discretionary grants were awarded to...

Many countries have adopted decentralization policies in order to strengthen democratic governance. Nevertheless, empirical literature on whether decentralization actually strengthens democratic governance is relatively limited when compared to empirical literature on the impact of...

Using data on federal highway grants from the Department of Transportation's Federal Highway Administration, this paper investigates several questions regarding the political economy of highway funding. We investigate the period 1994 - 2008 and examine whether political alignment and political...

Purpose This study investigates the impact of political alignment on intergovernmental transfers to the Brazilian unified health system (SUS). The authors analyzed both automatic transfers based on pre-established rules and discretionary transfers, using two criteria of political alignment...

Using application-level data on successful and rejected applications for the European Union's Structural and Cohesion Funds between 2004 and 2012 in Hungary, we study which grant types are susceptible to political manipulation and how politicians achieve this goal. Using township fixed-effect...