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The Politics of Subnational Coalition Building THE POLITICS OF SUBNATIONAL COALITION BUILDING. GUBERNATORIAL REDISTRIBUTIVE STRATEGIES IN ARGENTINA AND BRAZIL by Germán Lodola B. S. in Political Science, Universidad de Buenos Aires, 1992 M. A. in Political Science, University of Pittsburgh, 2003 Submitted to the Graduate Faculty of Arts and Sciences in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Political Science University of Pittsburgh 2010 UNIVERSITY OF PITTSBURGH ARTS AND SCIENCES This dissertation was presented by Germán Lodola It was defended on December 2, 2010 and approved by William Keech, PhD, Research Professor, Duke University Scott Morgenstern, PhD, Associate Professor, University of Pittsburgh Aníbal Pérez-Liñán PhD, Associate Professor, University of Pittsburgh Dissertation Director: Barry Ames, PhD, Andrew W. Mellon Professor, University of Pittsburgh ii Copyright © by Germán Lodola 2010 iii THE POLITICS OF SUBNATIONAL COALITION BUILDING. GUBERNATORIAL REDISTRIBUTIVE STRATEGIES IN ARGENTINA AND BRAZIL Germán Lodola, PhD University of Pittsburgh, 2010 This dissertation unfolds subnational political phenomena by engaging questions about redistributive politics and territorial power-building. How do state governors in federal systems strategically harness public expenditures to influence vote choice? What causes these leaders to emphasize the allocation of private versus semi-public goods? Are governors rewarded for their redistributive efforts at the ballot box? And if this is the case, why are some governors able to retain power during long periods of time while others are not? These issues are investigated both within and between Argentina and Brazil, two federations regarded as textbook examples of robust federalism, during the post-authoritarian period. The argument has two causal chains. The first chain espouses that variation in subnational redistributive politics is attributable to the structure of fiscal federalism and political careerism. Gubernatorial incentives for private allocations (patronage or public employment) are stronger where, such as in Argentina, fiscal institutions concentrate access to federal transfers at the state level and grant governors high discretion over these funds, and electoral and partisan rules foster party-centered political careers. By contrast, gubernatorial incentives for semi-public allocations (pork-barrel or infrastructure projects) are stronger where, such as in Brazil, fiscal institutions disperse access to federal transfers among political actors and limit governors’ discretion in spending, and electoral and partisan rules maximize candidate-centered political careers. iv The second causal chain links subnational redistributive politics with incumbents’ electoral returns. Statistical analyses indicate that patronage tend to benefit Argentine (but not Brazilian) governors, while pork-barrel benefits Brazilian (but not Argentine) ones. These different returns are explained by stressing the role of political competition and delivering networks of support. It is finally argued that extensive patronage-based networks as found in Argentina contribute to subnational incumbent stability by shaping expectations about the future distribution of public jobs over a stable web of party operatives, who are able to dissuade voters from migrating to the opposition. In contrast, pork-barrel networks as found in Brazil are less conducive to incumbent stability because they are weakly enmeshed in society so as to monitor voter behavior. v TABLE OF CONTENTS ACKNOWLEDGMENTS ....................................................................................................... XIV 1.0 THE POLITICS OF SUBNATIONAL COALITION-BUILDING ........................ 1 1.1 THE SUBSTANTIVE PUZZLES .................................................................... 10 1.1.1 The First Puzzle: Patronage and Pork-Barrel Systems ............................. 12 1.1.2 The Second Puzzle: Subnational Incumbent Stability ............................... 18 1.2 THE MAIN ARGUMENT ................................................................................ 25 1.2.1 The First Causal Chain ................................................................................. 29 1.2.1.1 Fiscal Federalism ................................................................................. 30 1.2.1.2 Political Careerism .............................................................................. 40 1.2.2 The Second Causal Chain ............................................................................. 42 1.3 A TYPOLOGY OF SUBNATIONAL PARTICULARISM .......................... 46 1.4 CONCEPTUALIZING PARTICULARISTIC POLITICS ........................... 52 1.5 THE COUNTRY CASES .................................................................................. 64 1.6 OVERVIEW AND ROAD MAP ...................................................................... 66 2.0 FISCAL FEDERALISM AND SUBNATIONAL PARTICULARISTIC SPENDING IN ARGENTINA ................................................................................................... 70 2.1 HIGH SUBNATIONAL VERTICAL FISCAL IMBALANCE .................... 73 vi 2.2 THE MECHANISMS OF TRANSFER ALLOCATION: PROVINCIAL STRENGHT AND MUNICIPAL WEAKNESS .............................................................. 92 2.3 THE CLOSENESS OF BUDGET RULES...................................................... 97 2.4 THE GUBERNATORIAL BIAS OF TRANSFER INSTITUTIONS ......... 103 2.5 THE SOFTNESS OF SUBNATIONAL BUDGET CONSTRAINTS ......... 111 2.6 CONCLUSION ................................................................................................ 117 3.0 FISCAL FEDERALISM AND SUBNATIONAL PARTICULARISTIC SPENDING IN BRAZIL .......................................................................................................... 118 3.1 LOW SUBNATIONAL FISCAL IMBALANCE AND MUNICIPAL AUTONOMY .................................................................................................................... 121 3.1.1 Historical Evolution ..................................................................................... 122 3.1.2 The Democratic Period ............................................................................... 132 3.2 THE OPENNESS OF BUDGET RULES ...................................................... 148 3.3 THE HARDNESS OF SUBNATIONAL BUDGET CONSTRAINTS ....... 156 3.4 CONCLUSION ................................................................................................ 163 4.0 POLITICAL CAREERISM AND SUBNATIONAL PARTICULARISTIC SPENDING ................................................................................................................................ 164 4.1 THE ARGENTINE AND BRAZILIAN SUBNATIONAL POLITICAL REGIMES ......................................................................................................................... 169 4.1.1 The Rules of the Electoral Game ................................................................ 171 4.1.2 Candidate Selection and Campaign Finance ............................................ 183 4.1.3 Public Service Systems ................................................................................ 195 vii 4.2 SUBNATIONAL CAREER AMBITIONS AND PARTICULARISTIC SPENDING ....................................................................................................................... 203 4.2.1 A Typology of Political Careers in Federalized Systems ......................... 207 4.2.1.1 Horizontal-Static Subnational Ambition ........................................ 215 4.2.1.2 Horizontal-Progressive Subnational Ambition .............................. 227 4.2.1.3 Vertical-Progressive Subnational Ambition ................................... 235 4.3 CONCLUSION ................................................................................................ 239 5.0 SUBNATIONAL PARTICULARISM AND ELECTORAL RETURNS ........... 242 5.1 EXPLAINING SUBNATIONAL ELECTORAL OUTCOMES ................. 246 5.2 WHAT AND HOW PARTICULARISTIC SPENDING MATTERS? ....... 254 5.3 DATA AND METHODS ................................................................................. 258 5.4 EMPIRICAL ANALYSIS ............................................................................... 281 5.5 CONCLUSION ................................................................................................ 313 6.0 OVERVIEW OF FINDINGS .................................................................................. 316 6.1 BEYOND ARGENTINA AND BRAZIL ....................................................... 322 APPENDIX A ............................................................................................................................ 325 APPENDIX B ............................................................................................................................ 329 APPENDIX C ............................................................................................................................ 357 APPENDIX D ............................................................................................................................ 369 BIBLIOGRAPHY ..................................................................................................................... 385 viii LIST OF TABLES Table 1: Career Experience of Argentine and Brazilian Governors, 1982-2007 ........................ 229 Table 2: Correlation between National and State Macroeconomic Conditions at the Time of Argentine Gubernatorial Elections,
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