Research Library

Argentina Program



Voters as Fiscal Liberals: Incentives and Accountability in Federal Systems

Voters as Fiscal Liberals: Incentives and Accountability in Federal Systems.

By Mark P. Jones, Osvaldo Meloni and Mariano Tommasi

This paper posits that the structure of fiscal federalism in countries like Argentina causes voters to reward fiscal expansion because they perceive that this extra spending at the margin is not financed by them, but rather by the nation at large. The authors provide evidence and microfoundations for the electoral connection implicit in this argument: voters reward public spending when they can pass the cost on to someone else (e.g., as in Argentina), and punish it otherwise (e.g., as in the United States).

Published July 2012 in Economics & Politics