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This paper examines the effect of political competition in local elections in regional allocation of public investment. The study employs data on Mexican elections covering the period 1990-1995, characterized by an increase in electoral competition & coupled with increasing demands for decentralization throughout the states. Empirical evidence supports the hypothesis that regional allocation of public investment by central government was driven by 'political opportunism' & 'local pork-barrel politics.' A positive relationship was found between the regional allocation of public investment & support for the central ruling party. This might indicate that local spending inefficiencies were partially explained by the specific support for the incumbent party. 4 Tables, 43 References. Adapted from the source document.

This paper examines the causality between central government spending in regions and local elections, in an environment of increasing electoral competition and a undefined decentralisation. This study examines Mexican elections during the period 1990-1995 where the main party started loosing part of its influence and there were many claims of use of the budget to favour the central governing party. We employ data on public investment and municipalities ruled by the PRI in each Mexican region. The evidence shows that there is opportunistic behaviour of the central government using public investment to gain local control of pressures for decentralisation.