Competition over Redistribution

This paper analyzes a game of redistributive politics in which targeted spending arises as a result of the competition over resources among jurisdictions. I build a political agency model in which a vote-maximizing politician is subject to the oversight of distinct constituencies. Voters' demand for local public goods in these constituencies is driven down by the competition among them. I characterize the unique equilibrium of this game. In the equilibrium, in order to make his constituency an attractive choice for federal spending, each voter demands somewhat less spending than what he actually receives. As a result, the voters tend to be satisfied with the redistributive policies of the incumbent. The incumbent is then quite likely to win more than half of the votes