Beschreibung:
We examine how local governments’ political alignment with central government affects subnational fiscal outcomes. In theory, alignment could be rewarded with more intergovernmental transfers, or swing voters in unaligned constituencies could be targeted instead. We analyze data from Ghana, which has a complex decentralized system that seeks to preclude political alignment effects. District Chief Executives (DCEs) are centrally-appointed local administrators loyal to the ruling party, while district Members of Parliament (MPs) may belong to another party. A formula for central transfer distribution aims to limit the influence of party politics. Using a new dataset for 1994-2018 we find that despite this system, districts with aligned MPs and DCE receive more transfers, have higher district expenditure, and more internally generated funds. However, it is the swing districts that benefit the most from term to term: the ‘safer’ districts see lower increases in fiscal outcomes relative to the (potential) ‘swing’ districts. We also show strong electoral cycle effects, with peaks in fiscal outcomes mid-term and in election years