Marcelin Joanis

The road to power: partisan loyalty and the centralized provision of local infrastructure

This paper sets out a simple dynamic probabilistic voting model in which a government allocates a fixed budget across electoral districts that differ in their loyalty to the ruling party. The model predicts that the geographic pattern of spending depends on the way the government balances long-run ‘machine politics’ considerations and the more immediate concern to win over swing voters. Empirical results obtained from a panel of electoral districts in Québec provide robust evidence that districts which display loyalty to the incumbent government receive disproportionately more spending, especially close to an election, at odds with the standard ‘swing voter’ view.

A comparative analysis of funding schemes for public infrastructure spending in Quebec

The economic literature has been investigating the positive relation between public infrastructure spending and the productivity of the private sector since Munnell (1992). We have introduced this relationship into a recursive dynamic computable general equilibrium model of the Quebec economy to investigate various funding schemes to scale up infrastructure spending in the province. We draw our assumptions from Estache et al. (2010) combined with sectoral elasticity parameters. We conduct a comparative analysis where the funding comes from debt alone, and debt with sales tax, income tax and business tax. Our main finding is that the income tax seems to produce the most positive effects and the businesses tax the most negative effects, though differences are small.

Sharing the blame? Local electoral accountability and centralized school finance in California

While electoral accountability should be stronger when responsibilities are clearly assigned to one political office, the involvement of higher tiers of government is often associated with policies specifically designed to improve local accountability. This paper investigates the impact of centralization on local electoral accountability in the context of California�s school finance system. Results show that voters are responsive to differences in dropout rates and pupil-teacher ratios, and that incumbents are less likely to be reelected when a district�s degree of centralization is high. The No Child Left Behind Act of 2001 appears to have sharpened local electoral accountability.

Elections and de facto Expenditure Decentralization in Canada

This paper empirically investigates the underlying determinants of expenditure decentralization, based on the predictions of a new political economy model of partial decentralization. The analysis is based on an agency model, in which two levels of government are involved in the provision of a public good and voters are imperfectly informed about each governments contribution to the good, creating a shared accountability problem. Under shared expenditure responsibility, the degree of decentralization is endogenous and depends on the relative political conditions prevailing at each level of government. Consistent with the models predictions, empirical results from a panel of Canadian provinces show that decentralization in a province increases with the electoral strength of the provincial government and decreases with the electoral strength of the federal government, in addition to being affected significantly by the partisan affiliation of both levels of government. A series of alternative empirical specifications, including an IV regression exploiting campaign spending data, are presented to assess the robustness of these results.

The Politics of Checkbook Federalism: Can Electoral Considerations Affect Federal–Provincial Transfers?

This article adopts the perspective of second-generation fiscal-federalism theory to provide an empirical assessment of Canada’s intergovernmental fiscal arrangements. In the context of the literature on the political economy of intergovernmental grant programs, it examines the influence of political considerations on the evolution of the Canadian fiscal arrangements under the Constitution Act of 1982. Fixed-effect regression results exploiting data from the 1982 to 2012 period show a statistically significant relationship between changes in both federal and provincial electoral variables and changes in a province’s total federal transfer revenues. Changes to social transfers appear to be more reactive to changes in the political environment than do changes in equalization transfers.This article adopts the perspective of second-generation fiscal-federalism theory to provide an empirical assessment of Canada’s intergovernmental fiscal arrangements. In the context of the literature on the political economy of intergovernmental grant programs, it examines the influence of political considerations on the evolution of the Canadian fiscal arrangements under the Constitution Act of 1982 . Fixed-effect regression results exploiting data from the 1982 to 2012 period show a statistically significant relationship between changes in both federal and provincial electoral variables and changes in a province’s total federal transfer revenues. Changes to social transfers appear to be more reactive to changes in the political environment than do changes in equalization transfers.

Public Redistribution and Inequality in a Period of Fiscal Consolidation: A Decomposition Analysis for Canada in the 1980s and 1990s

This article documents the evolution of income inequality during Canadas major fiscal consolidation of the mid-1980s to the mid-1990s, one of the most spectacular fiscal turnarounds in recent economic history. Our main objective is to understand why overall market income inequality rose between 1986 and 1996, while that of disposable income did not. To analyse this question, we use data from the Survey of Consumer Finances and two distinct decomposition methodologies. Our results show that both the automatic stabilisation effect of transfer programmes and the rise in personal income taxes explain the performance of the Canadian tax and transfer system in offsetting market income inequality growth during the fiscal consolidation decade. Canadas fiscal consolidation episode, which placed more weight on rising taxes than on cuts in transfer programmes, was thus an inequality reducing factor.