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Elections and the Geographic Distribution of Grants: Political Manipulation or Equalizing Local Finance?
The present study explores whether the geographic distribution of grants among counties and cities, offered by the Taiwan Provincial Government (TPG) from FY1988 to FY1995, is aiming at equalizing local finance or manipulating elections. Specifically, we ask if the size of grants during the election years is larger than non-election years? We also ask whether the decision regarding the distribution of grants made by the Taiwan Provincial Government is contingent upon the consideration of electoral success of the ruling party KMT? That is, under the command of the ruling party KMT, does the TPG offer disproportionate grants to the most vulnerable districts regardless of the objective needs?Briefly, statistical results show that the size of provincial grants during the election years is larger than non-election years. The results also show that the disproportionate provincial grants do flow to KMT's vulnerable districts in the election of the Taiwan Provincial Legislators and the election of county in chief and city mayor, but not in the election of Lawmakers of the Legislative Yuan. These findings suggest that, in addition to maintaining the KMT's partisan advantaged position, the TPG distributes disproportionate benefits to vulnerable districts based on political considerations of its own. First, the budget security of the TPG is dependent on the Taiwan Provincial Legislators. Thus, helping candidates of provincial legislators who are most vulnerable to be elected or reelected by distributing provincial grants to his or her districts may exchange future support of provincial legislators. Second, the TPG needs the cooperation of city government and county government in policy implementation. Hence, the TPG expect to bring partnership of local governments in the future if the TPG offers assistant expenditures for those incumbents of city mayor or county in chief who are most vulnerable in the election.Finally, although we find clear evidences of political manipulation in the distribution of Taiwan provincial grants, the objective criteria-capacity of self-financing still plays an important role in the decision of grant distribution. We find that the counties or cities with low capacity of self-financing receive more grants than those with high capacity of self-financing. In other words, electoral consideration may exist in the distribution of provincial grants, yet equalizing local finance is still not ignored in the decision process.
