Public Choice

, Volume 171, Issue 1–2, pp 223–241 | Cite as

Granting votes: exposing the political bias of intergovernmental grants using the within-between specification for panel data

  • Josip Glaurdić
  • Vuk VukovićEmail author


Instead of alleviating fiscal inequalities, intergovernmental grants are often used to fulfill the grantors’ political goals. This study uses a unique panel dataset on more than 500 Croatian municipalities over a 12-year period to uncover the extent to which grant distribution is biased owing to grantors’ electoral concerns. Instead of the default fixed effects approach to modelling panel data, we apply a novel within-between specification aimed at uncovering the contextual source of variation, focusing on the effects of electoral concerns on grant allocation within and between municipalities. We find evidence of a substantial political bias in grant allocations both within and between municipalities, particularly when it comes to local-level electoral concerns. The paper offers researchers a new perspective when tackling the issue of politically biased grant allocation using panel data, particularly when they wish to uncover the simultaneous impact of time-variant and time-invariant factors, or when they cannot apply a quasi-experimental approach because of specific institutional contexts.


Intergovernmental grants Political bias Within-between specification Vote-buying 

JEL Classification

D72 H77 C23 



Josip Glaurdić and Vuk Vuković wish to thank Irena Kravos of the Croatian Electoral Commission, Ivanka Purić of the Croatian Bureau of Statistics, Mirna Valinger of the Croatian Tax Administration, and in particular to Maruška Vizek of the Institute of Economics, Zagreb for invaluable help with data collection. The article has benefited from comments and suggestions by Andrew Bell and Kelvyn Jones, and two anonymous reviewers. Josip Glaurdić is also grateful to the Leverhulme Trust and the Isaac Newton Trust (ECF-2012-399\7) which supported his work on this study.

Supplementary material

11127_2017_435_MOESM1_ESM.docx (35 kb)
Supplementary material 1 (DOCX 35 kb)


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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.Institute of Political ScienceUniversity of LuxembourgEsch-sur-AlzetteLuxembourg
  2. 2.Department of Politics and International RelationsUniversity of OxfordOxfordUK

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