Political dynasty and local fiscal performance
Date
2012-10
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Abstract
Using panel data from the fiscal reports of municipalities in the province of Rizal, our paper examines the impact of political dynasties on local fiscal performance, as measured by the ability to generate local revenues, dependency on fiscal transfers, and per capita expenditure on social services. Our findings suggest that, compared with non-dynastic municipalities, dynastic municipalities have lower local revenue collection, higher dependency on the Internal Revenue Allotment (IRA), and higher spending per capita on social services. Moreover, the high social spending behavior of dynastic municipalities is seemingly facilitated by their high dependency on IRA These results seem consistent with the view regarding the predatory tendencies of political dynasties. The concentration of power within a single political family tends to breed a culture of rent-seeking behavior and lack of incentive to work for the long-term welfare of its constituency.
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Keywords
Political dynasty, Local fiscal performance