Abstract

FLAMAND, Laura. The Allocation Game in a Federal System. The Influence of Vertically Divided Government on the Allocation of Federal Transfers to the Mexican States.Translated byVirgilio Chávez de la Torre. Polít. gob [online]. 2006, vol.13, n.2, pp.315-359. ISSN 1665-2037.

Political scientists have largely overlooked the consequences of democratization on the operation of federations. This article analyzes whether the emergence of party competition has transformed intergovernmental relations in Mexico. It explores whether competitive elections and vertically divided government, as elements of democratization, have changed fiscal relations between the states and the federal government. The article uses fixed-effects time-series cross-section models with panel corrected standard errors to estimate the effects of these variables on the allocation of federal unconditional transfers (participaciones) and conditional grants (transferencias or aportaciones) to Mexican states during the nineties. The article provides evidence supporting the hypothesis that democratization had an impact on the allocation of financial resources to the states. The statistical results suggest that states governed by political parties other than the party of the president (PRI) and those electorally competitive received larger increases in conditional and unconditional transfers than PRI-dominated states or those less competitive.

Keywords : democratization; federalism; fiscal transfers; subnational governments.