Skip to main content
SpringerLink
Log in

Electoral Risk and Redistributive Politics in Mexico and the United States

  • Published:
Studies in Comparative International Development Aims and scope Submit manuscript

Abstract

What strategy does a rational party follow in allocating discretionary expenditure? This article conceives redistributive politics as an investment strategy where expenditure allocations respond to electoral risk. To show the effects of risk, it provides evidence from Pronasol in Mexico and an analysis of New Deal spending in the United States. The analysis finds that the federal administrations in both countries responded to systematic electoral risk. Spending diversification into risky voters was a rational response to chances of losing elections. The analysis hence connects electoral volatility with redistributive spending.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. Exceptions are the work by Wright (1974) on the New Deal in the United States, discussed below, and the debate emerging from it, and the work by Diaz-Cayeros et al. (2008) in Mexico.

  2. For a review of vote-buying models, see Diaz-Cayeros et al. (2008).

  3. Moreover, as noted by Cox and Thies (2000) and Schady (2000), among others, it is not correct to use the margin of victory of the current election to test for swing voters, because vote margins already incorporate the possible effects of transfers on vote choices.

  4. Formally, following Dixit and Londregan (1996), if two parties A and B attempt to maximize votes offering to voters consumption bundles CiA and CiB, an individual voter in a particular region will abandon the incumbent voting for party B if the utility differential of those consumption bundles is greater than the proclivity to prefer the incumbent, given by X, namely: U(CiA)−U(CiB)>X. The cutpoint defines the split between voters who prefer the incumbent to the opponent and is given by the X where this relationship is strictly equal, in the sense that the utility differential is exactly the same as the affinity X. As noted by Dahlberg and Johansson (2002) in probabilistic voting models, the equilibrium outcome is that both parties offer the same consumption bundles, so the cutpoint is where X=0. The share of votes of each party is given by a voter density f(X) before and after the cutpoint. The overall votes each party receives in the country will depend on the relative size of each region (N) multiplied by the density. Hence, resources will be devoted to regions with larger populations and greater densities at the X cutpoint.

  5. Empirically, a different possibility would be to use opinion polls to calculate the closeness of specific races and the responsiveness of various groups of voters to different campaign strategies. In particular, one could envisage a poll in which incumbents could calculate the vote elasticity of a certain amount of spending targeted to a particular type of voters or specific districts.

  6. There might be differences among politicians in their attitude to risk. It is conceivable, for example, that the longer an incumbent has been in office in a particular place, the more risk averse he becomes, while it is possible that politicians that are out of office can be risk seeking.

  7. Data for Mexico was calculated from “México Electoral. Estadísticas federales y locales 1970–2000,” Banamex-Accival, 2001; data for the U.S. was calculated from Clubb et al. (1986), ICPSR study 8611.

  8. The reason to concentrate in state-level data is that individual localities, like individual stocks, can be far more volatile than portfolios. In the empirical finance literature, tests of betas are not performed with individual stocks, but with sets of diversified portfolios. I perform a test of the effects of risk on resource allocation conceiving states as portfolios of lower aggregation assets, such as electoral districts or precincts. Elsewhere, I have calculated beta coefficients for municipalities in Mexico (Diaz-Cayeros et al. 2008). Future empirical work could perform a test similar to Fama and French (1996), in which counties, municipalities, or states could be ordered by size, and the beta coefficients calculated for each group according to its relative importance in the electoral victory of, for example, a presidential race.

  9. A negative alpha should be interpreted as indicating that the core supporters are in the other parties.

  10. The literature on the program is relatively large. A good place to start is the edited volume by Cornelius, Craig, and Fox (1994) and the references in Diaz-Cayeros et al. (2008).

  11. The database on Pronasol spending was compiled by Marcela Gómez and Sandra Pineda.

  12. The source of these variables is Fleck (2001a, b).

  13. Unreported estimates also made for two of the components of New Deal spending have received special attention. The first is the Federal Emergency Relief Administration (FERA), which only operated from 1933 to 1935. In FERA funds, which were discretionally controlled by both the federal government and governors, I find stronger effects for risk; a different pattern is observed in the allocation of road spending. In that component of New Deal spending, Key (1937) notes that a formula was established in the Federal Highway Act of 1916, which was fundamentally based on population, land area, and the prevailing quality of roads. He also noted that over time “Congress has modified it [the apportionment of funds] through additional appropriations allotted in other ways.” Although land area constituted the most important determinant for the allocation of these funds, road construction was biased similarly, according to electoral risk, as total New Deal funding.

  14. Fleck (2001a, b) provides evidence of the importance of swing voters for the case of FERA, using county level data.

References

  • Arrington L. The new deal in the west: a preliminary statistical inquiry. Pac Hist Rev. 1969;38:311–6.

    Google Scholar 

  • Anderson GM, Tollison RD. Congressional influence and patterns of new deal spending. 1933–1939. J Law Econ. 1991;34:161–75.

    Article  Google Scholar 

  • Banamex-Accival. México electoral. Estadísticas federales y locales 1970–2000 (CD-ROM). Mexico: Grupo Financiero Banamex-Accival; 2001.

  • Bodie Z, Kane A, Marcus A. Investments. Fifth ed. Boston: McGraw-Hill; 2001.

    Google Scholar 

  • Clubb JM, Flanigan WH, Zingale NH. Electoral data for counties in the United States. Presidential and congressional races, 1840–1972. Interuniversity Consortium for Political and Social Research (ICPSR) data file 8611; 1986.

  • Cornelius W, Craig A, Fox J. editors. Transforming state-society relations in Mexico: the national solidarity strategy. La Jolla: Center for U.S.-Mexican Studies, UCSD; 1994.

  • Couch JF, Shughart WF. The political economy of the new deal. Cheltenham (UK): Edward Elgar; 1998.

    Google Scholar 

  • Cox G, McCubbins MD. Electoral politics as a redistributive game. J Pol. 1986;48:370–89.

    Article  Google Scholar 

  • Cox G, Thies M. How much does money matter? ‘Buying’ vote in Japan, 1967–1990. Comp Pol St. 2000;33(1):37–57.

    Article  Google Scholar 

  • Crain WM, Messenheimer HC, Tollison RD. The probability of being president. Rev Econ Stat. 1993;75(4):683–9.

    Article  Google Scholar 

  • Dahlberg M, Johansson E. On the vote-purchasing behavior of incumbent governments. Am Polit Sci Rev. 2002;96(1):27–40.

    Google Scholar 

  • Diaz-Cayeros A, Estevez F, Magaloni B. (2008) Strategies of vote buying: social transfers, democracy and welfare in Mexico (typescript, Stanford University).

  • Dixit A, Londregan J. The determinants of success of special interests in redistributive politics. J Polit. 1996;58:1132–55.

    Article  Google Scholar 

  • Fama E, French K. Multifactor explanations of asset pricing anomalies. J Finance. 1996;51:55–86.

    Article  Google Scholar 

  • Fleck RK. The value of the vote: a model and test of the effects of turnout on distributive policy. Eco Inq. 1999;37(4):609–23.

    Article  Google Scholar 

  • Fleck RK. Inter-party competition, intra-party competition, and distributive policy: a model and test using New Deal data. Public Choice. 2001a;108:77–100.

    Article  Google Scholar 

  • Fleck RK. Population, land, economic conditions, and the allocation of new deal spending. Explor Econ Hist. 2001b;38:396–04.

    Article  Google Scholar 

  • Fleck RK. Voter influence and big policy change: the positive political economy of the new deal. J Polit Econ. 2008;1(116):1–37.

    Article  Google Scholar 

  • Hurja E. Materials relating to the ‘National Inquirer’ presidential preference polls (Hurja Papers). Hyde Park, NY: FDR Library; 1935.

  • Key VO. The administration of federal grants to states. Crawfordsville: Donnelley and Sons; 1937.

    Google Scholar 

  • Lindbeck A, Weibull J. Balanced budget redistribution as the outcome of political competition. Public Choice. 1987;52(3):273–97.

    Article  Google Scholar 

  • Londregan J. Political income redistribution. In: Weingast B, Wittman D, editors. The Oxford handbook of political economy. Oxford: Oxford University Press; 2006.

    Google Scholar 

  • Molinar J, Weldon J. Electoral determiants and consequences of national solidarity. In: Cornelius W, Craig A, Fox J, editors. Transforming state–society relations in Mexico: the national solidarity strategy. La Jolla: Center for U.S.–Mexican Studies, UCSD; 1994.

    Google Scholar 

  • Persson T, Tabellini G. Economic Politics. Cambridge: MIT Press; 2001.

    Google Scholar 

  • Rose R, Urwin D. Persistence and change in western party systems since 1945. Polit Stud. 1970;18(3):287–319.

    Article  Google Scholar 

  • Schady NR. The political economy of expenditures by the Peruvian Social Fund (FONCODES), 1991–95. Am Polit Sci Rev. 2000;94(2):289–304.

    Article  Google Scholar 

  • Sharpe W. Capital asset prices: a theory of market equilibrium under conditions of risk. J Finance. 1964;19:425–42.

    Article  Google Scholar 

  • Wright G. The political economy of new deal spending: an econometric analysis. Rev Econ Stat. 1974;56(1):30–8.

    Article  Google Scholar 

  • Wallis JJ. The birth of the old federalism: financing the new deal. J Econ Hist. 1984;44:139–59.

    Article  Google Scholar 

  • Wallis JJ. Employment, Politics and Economic Recovery During the Great Depression. Rev Econ Stat. 1987;59:516–20.

    Article  Google Scholar 

  • Wallis JJ. The political economy of new deal spending revisited, again: with and without Nevada. Exp Eco His. 1998;35:140–70.

    Article  Google Scholar 

  • Wallis JJ. The political economy of new deal spending, yet again: a reply to Fleck. Explor Econom Hist. 2001;38:296–304.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Political Science, Stanford University, Encina Hall, Room 100 West, Stanford, CA, 94305-6044, USA

    Alberto Diaz-Cayeros

Authors
  1. Alberto Diaz-Cayeros
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Alberto Diaz-Cayeros.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Diaz-Cayeros, A. Electoral Risk and Redistributive Politics in Mexico and the United States. St Comp Int Dev 43, 129–150 (2008). https://doi.org/10.1007/s12116-008-9020-1

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12116-008-9020-1

Keywords

Search

Navigation