Intergovernmental grants as a tactical instrument: empirical evidence from Swedish municipalities

Are grants to Swedish municipalities tactical, that is, do parties use these in order to get elected? In this paper, the theoretical model of Lindbeck and Weibull and Dixit and Londregan is tested, using panel data on 255 Swedish municipalities for the years 1981-1995. The empirical implication of the theory is that groups with many swing voters will receive larger grants than other groups. In the paper, a new method of estimating the number of swing voters is proposed and used. The results support the hypothesis that intergovernmental grants are used in order to win votes. (C) 2001 Elsevier Science B.V. All rights reserved.