Against the tide: how changes in political alignment affect grant allocation to municipalities in Hungary
利用2015-2020年匈牙利3000多个市镇的数据，研究发现2019年地方选举后，政治联盟变化显著影响中央对地方政府的自由裁量拨款，尤其是较大市镇更易受政治影响。
Abstract The 2019 local election in Hungary accelerated the trend of centralization, marked by a simultaneous reduction in available local funds and an increase in discretionary transfers to local governments. This paper, utilizing a dataset encompassing all over 3000 municipalities from 2015 to 2020, employs fixed-effect estimations and a regression discontinuity design to explore how election outcomes influenced central decisions on intergovernmental transfers. Generally, larger municipalities are more susceptible to political influence, particularly in the allocation of discretionary grants, whereas smaller settlements appear less affected by political shifts. Changes in political alignment triggered a rewarding policy for municipalities that remained or converted to aligned status, resulting in an additional 86.4% and 65.2% of discretionary funds, respectively, relative to those converting to or remaining unaligned. Our research establishes that political influence in intergovernmental transfers has intensified since 2019, offering valuable insights for the upcoming 2024 election.