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Political Budget Cycles and Intergovernmental Transfers in a Dominant Party Framework: Empirical Evidence from South Africa
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by Kroth, Verena

This paper tests the theory of context-conditional political budget cycles in South Africa’s dominant party framework and demonstrates that the central government has both an incentive and the ability to implement PBCs on the subnational level. Using a unique panel dataset comprising South Africa’s nine provinces over the period 1995–2010 generates two main results: First, provinces where the national ruling party faces greater electoral competition receive higher per capita transfers in the year before an election. Second, this increase is driven by the conditional grant, which is the non- formula-based component of total the intergovernmental transfer. The ability to implement political budget cycles is successfully constrained when it comes to the formula-based equitable share component of the total transfer for which no evidence of electorally-induced funding is found. Overall, the results suggest that even in a dominant party framework, political competition can function as an incentive to implement political budget cycles.

Publication Type: WCFIA Working Paper
Published Date: November 2012
Field of Interest: International Relations
Kroth, Verena. "Political Budget Cycles and Intergovernmental Transfers in a Dominant Party Framework: Empirical Evidence from South Africa." Working Paper 2012-0002, Weatherhead Center for International Affairs, Harvard University, November 2012.