The Allocation of Conditional Cash Transfer Programs: Political Motives and Voting Effects

Abstract

Abstract This article reports evidence concerning both the political manipulation in the regional allocation of the largest conditional cash transfer program in Colombia, and the political rewards that the incumbent national government obtained in the presidential elections by providing this program. To do this, we use a comprehensive data set for Colombian municipalities during the expansion period of the program between 2005 and 2009. Our evidence shows that, although the incumbent government followed the preestablished criteria for program allocation across municipalities, this manipulated the allocation of subsidies by targeting intensively swing municipalities and less intensively loyal municipalities. Our findings also show that, even after controlling for the effect of the political manipulation of the program on the incumbent vote share, the incumbent national government was politically rewarded by the electorate for providing subsidies through the program. Taken together, our results suggest that voters rewarded the incumbent governing coalition not only for redirecting the subsidies of the program but also for the allocation of subsidies in itself.