Sending the pork home: birth town bias in transfers to Italian municipalities

Abstract

We analyze the distribution of central transfers to municipal governments for the period between the 1993 and the 2005 electoral reforms using a panel of Italian municipalities. We find evidence that being the birth town of a Member of Parliament results in an increase in yearly transfers per capita paid to a municipal administration of roughly 2 percent. Controlling for town fixed effects and concentrating on politicians who are member of economic commissions we confirm that the effect is driven by an active behavior of the politician and not by unobserved town-level characteristics. Using a feature of single member district systems we are able to conclude that these actions are not driven by the desire of being re-elected in Parliament, the standard explanation for pork-barrel spending in the literature. Instead, our results suggest that those extra transfers may be a way for a politician to prepare the ground for a post-congressional career in local government.