TY  - JOUR
AU  - Drazen,Allan
AU  - Eslava,Marcela
TI  - Pork Barrel Cycles
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12190
PY  - 2006
Y2  - May 2006
UR  - http://www.nber.org/papers/w12190
L1  - http://www.nber.org/papers/w12190.pdf
N1  - Author contact info:
Allan Drazen
Department of Economics
University of Maryland
College Park, MD 20742
Tel: 301/405-3477
Fax: 301/405-7835
E-Mail: drazen@econ.umd.edu

Marcela Eslava
Universidad de Los Andes
Carrera 1 Este No 18 A -70. Bloque C
Bogota, Colombia
Tel: 571-339-4949
Fax: 571-332-4492
E-Mail: meslava@uniandes.edu.co
M2  - featured in NBER digest on 2006-05-01
AB  - We present a model of political budget cycles in which incumbents influence voters by targeting government spending to specific groups of voters at the expense of other voters or other expenditures. Each voter faces a signal extraction problem: being targeted with expenditure before the election may reflect opportunistic manipulation, but may also reflect a sincere preference of the incumbent for the types of spending that voter prefers. We show the existence of a political equilibrium in which rational voters support an incumbent who targets them with spending before the election even though they know it may be electorally motivated. In equilibrium voters in the more "swing" regions are targeted at the expense of types of spending not favored by these voters. This will be true even if they know they live in swing regions. However, the responsiveness of these voters to electoral manipulation depends on whether they face some degree of uncertainty about the electoral importance of the group they are in. Use of targeted spending also implies voters can be influenced without election-year deficits, consistent with recent findings for established democracies.
ER  -