The political geography of fiscal transfers: empirical evidence using data on Belgium.

Summary I analyse the relationship between the geographic distribution of the government budget on the one hand and the geographic distribution of political power and government popularity on the other hand in Belgium. In a 1st chapter I find evidence that a Belgian federal electoral district receives more social spending and/or pays less income taxes with every federal minister having been elected in that district. In a 2nd chapter I present a method for calculating net fiscal transfers between the 3 regions of Belgium resulting from interest payments on the federal debt, and I calculate that this method results in considerably larger net fiscal transfers from the Flemish region to Francophone Belgium than previously calculated. In a 3rd chapter I do find statistically robust evidence that votes in favour of political parties forming the federal government increase less in the Flemish region than in Francophone Belgium if social spending increases or income taxation decreases. This could be because Flemish voters are not or hardly aware that the ensuing increase in the federal debt increases net fiscal transfers from Flanders to Francophone Belgium. In a 4th chapter I find evidence for a number of political parties that intergovernmental grants to a municipality located in the Brussels region increase (decrease) if this municipality is governed (not governed) by the same political party as the subsidising government(s). In a 5th chapter I find evidence that a Belgian supra-local government increases its deficit if its number of ministers increases. This causal link however is not statistically robust for public expenditures.nrpages: 211status: publishe