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Essays on the Political Economy of Subnational Public Finances


Rosado Buenfil, Welmar Eduardo (2017) Essays on the Political Economy of Subnational Public Finances. Dissertation (Ph.D.), California Institute of Technology. doi:10.7907/Z94X55VX.


This dissertation is comprised of three essays addressing the connections between democracy and public finance at the subnational level. Chapter 2 focuses on variation within public expenditure, revenue, and debt at the state level in the United States for the period 1977-2011 seeking to uncover whether there is evidence of efforts by incumbents to manipulate state public finances to influence election outcomes. I find that total public expenditure increased the year before elections, especially during the period 1977-1994, but it is mostly driven by intergovernmental expenditure. Meanwhile, for later years there is a sizable reduction in tax revenue during electoral years, which results a debt increase. In Chapter 3, I extend the literature of political budget cycles at the subnational level to include pension funding. I explore the relationship between state pension funding and gubernatorial elections in the United States for the years 2001-2014. I show that one is more likely to observe the government and other employers undercontributing to pension funds during the pre-electoral year. I also found fluctuations in the pension fund's portfolio composition depending on how close a gubernatorial election is. Finally, in Chapter 4, I investigate whether the credit rating agencies (Fitch, Moody's, and Standard and Poor's) adjust the timing of their ratings as a function of the electoral calendar. I collect a novel database using credit ratings of Mexican states, and estimate panel models for gubernatorial elections in Mexico for 2005-2015. My results indicate that credit rating agencies delay announcing rating downgrades until after elections, especially when elections are very competitive.

Item Type:Thesis (Dissertation (Ph.D.))
Subject Keywords:Political Economy, Public Finance, Public Debt, Credit Rating Agencies, Public Pensions
Degree Grantor:California Institute of Technology
Division:Humanities and Social Sciences
Major Option:Social Science
Thesis Availability:Public (worldwide access)
Research Advisor(s):
  • Kiewiet, D. Roderick
Thesis Committee:
  • Kiewiet, D. Roderick (chair)
  • Alvarez, R. Michael
  • Ewens, Michael J.
  • Hoffman, Philip T.
Defense Date:15 May 2017
Non-Caltech Author Email:welmar.rosado (AT)
Record Number:CaltechTHESIS:06082017-184725474
Persistent URL:
Rosado Buenfil, Welmar Eduardo0000-0001-5179-7812
Default Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:10321
Deposited By: Welmar Rosado Buenfil
Deposited On:09 Jun 2017 23:45
Last Modified:04 Jun 2024 22:31

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