Autor: Streb Jorge Miguel *, Garofalo Pablo*, Rasteletti Alejandro**
Institución: (*)UCEMA, (**)Inter-American Development Bank
Año: 2025
JEL: D72, E62
Resumen:
We study vote for president and governor in a model where discretionary fiscal policy allows the president to favor politically aligned districts and, when there is asymmetric information, engage in political budget cycles. Voters value a candidate’s competence (selection motive) and political connections (alignment motive). Higher fiscal decentralization reduces the impact of distributive politics, making electoral accountability in federal countries depend more on the competence of each candidate. The model explains two-sided coattail effects through distributive politics, and implies a novel “drag” effect: more support for the president in other districts boosts the vote for an aligned governor and depresses it for an unaligned one. Data from elections in Argentina support these predictions, showing that good economic performance in the country hurts unaligned governors, while good economic performance in unaligned provinces hurts the president.