Published online by Cambridge University Press: 30 September 2015
We exploit the act of the conservative Greek government (2004–2009) to fiddle the books as a natural experiment in order to document a causal link between government spending and electoral fragmentation and identify the mechanism via which it operates. The retrospective revision of Greece’s deficit figures just before the 2010 regional elections constituted an information shock, which generated expectations for reduced pork-barrel spending. We decompose the resulting effect and uncover the main mechanism taking place: rent-seeking voting and patronage (client-voters abandoning the dominant parties due to less expected rents). We find that expected spending cuts caused a steep decline (increase) in the electoral support for dominant parties (fragmentation). This effect is significantly more pronounced in patronage-intense regions. Using the size of public sector as a proxy for patronage (Hicken 2011), we find that support for dominant parties declined differentially by 5 percentage points more on those regions. That is, at least one in six voters that abandoned the big parties did so out of purely opportunistic motivations. Overall, our work highlights the importance of institutional constraints in affecting electoral and political power-sharing.
Konstantinos Matakos, Assistant Professor (Lecturer) of Economics, Department of Political Economy, King’s College London, London WC2R 2LS (email@example.com). Dimitrios Xefteris, Assistant Professor of Economics, Department of Economics, University of Cyprus, P.O. Box 20537, 1678, Nicosia (firstname.lastname@example.org). The authors would like to thank the participants in various seminars and panels at the University of Warwick, Yale University, the University of Guelph, the University of Rochester, Goettingen University, the 2013 APSA Annual Conference, the 2014 MPSA Annual Conference and the 2014 RES Conference for useful comments and suggestions. Konstantinos Matakos would also like to thank Bhaskar Dutta, Ben Lockwood and Sharun Mukand for invaluable comments and stimulating discussions and Sascha O. Becker, Tasos Kalandrakis, Carlos Noton, Vera Troeger, Fabian Waldinger and three anonymous referees for useful suggestions and comments. Konstantinos Matakos gratefully acknowledges financial support from the “A.G. Leventis Foundation.” All errors remain ours. To view supplementary materials for this article, please visit http://dx.doi.org/10.1017/psrm.2015.50
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