Government Finance

Enriching Friends and Impoverishing Enemies: An Empirical Test of Public Spending and Political Retaliation

In a project conducted with Steven Brooke, we utilize new sub-national data on government spending to test whether or not “punishment regimes” exist. The World Bank’s BOOST data contain district-level observations for both government allocations and government spending. We leverage the differences between allocations and spending to create a measure of district-level budgetary punishments. By comparing these data to district-level electoral results in Poland, Kenya, and Peru, we find evidence that governments frequently short electoral districts their portions of the budget when the latter vote for opposition parties.