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Decentralization, Legislative Institutions and Particularistic Spending
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Version 8.3 August 25, 2003
Fiscal decentralization, legislative institutions and particularistic
spending
Alberto Diaz-Cayeros
Kenneth M. McElwain
Vidal F. Romero
Konrad A. Siewierski
1
ABSTRACT This paper examines the determinants of particularistic spending, the regularly observed phenomenon of government overspending on geographically targeted projects, where the projects’ costs are shared across territorial jurisdictions. We propose that government capital expenditures can provide a measure of the degree of particularism (i.e. “pork”) characterizing a country’s public spending. Particularism tends to be higher when local revenue collection is centralized, but expenditure is decentralized. When only a small proportion of local spending is financed by local revenue, politicians are able to transfer the costs of expensive projects to other localities, and fiscal discipline is weak. Some institutional features mitigate while others exacerbate the political incentives to overspend. When incumbent legislators do not electorally compete with each other – for example, in single-member districts – there are fewer checks on log-roll spending, and capital expenditures are high. Institutions such as unicameralism and parliamentarism reduce capital expenditures, since they limit the number of independently elected politicians that must assuage their constituents through particularistic projects.
Keywords: particularism, pork, single member districts, public spending, decentralization,
law of 1/n.
Paper prepared for the 2003 Meeting of the American Political Science Association Meeting,
Philadelphia, August 28-31.
1
Stanford University, Department of Political Science; Diaz-Cayeros is also adjunct professor of Political
Science at the Instituto Tecnológico Autónomo de México. Funding by the Stanford Institute for the Quantitative Study of Society (SIQSS) is gratefully acknowledged. We thank Jessica Seddon Wallack, Scott Morgenstern, Neal Beck, Dan Posner, David Laitin, Beatriz Magaloni and participants at the Stanford Comparative Politics Seminar and in the Conference on Comparative Analysis of Political Institutions at Princeton University for comments and critiques on earlier drafts. Of course, all errors remain our responsibility.
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| | Authors: Diaz-Cayeros, Alberto., McElwain, Kenneth., Romero, Vidal. and Siewierski, Konrad. |
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Version 8.3 August 25, 2003
Fiscal decentralization, legislative institutions and particularistic
spending
Alberto Diaz-Cayeros
Kenneth M. McElwain
Vidal F. Romero
Konrad A. Siewierski
1
ABSTRACT This paper examines the determinants of particularistic spending, the regularly observed phenomenon of government overspending on geographically targeted projects, where the projects’ costs are shared across territorial jurisdictions. We propose that government capital expenditures can provide a measure of the degree of particularism (i.e. “pork”) characterizing a country’s public spending. Particularism tends to be higher when local revenue collection is centralized, but expenditure is decentralized. When only a small proportion of local spending is financed by local revenue, politicians are able to transfer the costs of expensive projects to other localities, and fiscal discipline is weak. Some institutional features mitigate while others exacerbate the political incentives to overspend. When incumbent legislators do not electorally compete with each other – for example, in single-member districts – there are fewer checks on log-roll spending, and capital expenditures are high. Institutions such as unicameralism and parliamentarism reduce capital expenditures, since they limit the number of independently elected politicians that must assuage their constituents through particularistic projects.
Keywords: particularism, pork, single member districts, public spending, decentralization,
law of 1/n.
Paper prepared for the 2003 Meeting of the American Political Science Association Meeting,
Philadelphia, August 28-31.
1
Stanford University, Department of Political Science; Diaz-Cayeros is also adjunct professor of Political
Science at the Instituto Tecnológico Autónomo de México. Funding by the Stanford Institute for the Quantitative Study of Society (SIQSS) is gratefully acknowledged. We thank Jessica Seddon Wallack, Scott Morgenstern, Neal Beck, Dan Posner, David Laitin, Beatriz Magaloni and participants at the Stanford Comparative Politics Seminar and in the Conference on Comparative Analysis of Political Institutions at Princeton University for comments and critiques on earlier drafts. Of course, all errors remain our responsibility.
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