Assistant Professor Mario Jametti

This paper estimates the effect of government electoral strength on fiscal decentralisation. Using a panel of democracies, we find that greater government electoral strength at the central level, measured by the share of seats held by the governing party in the legislature, reduces expenditure centralisation. Revenue centralisation is less affected by electoral strength.

We test a specific theoretical prediction: insured pension plans will invest more heavily in risky assets. Our test exploits policy differences across Canadian jurisdictions. We find that insured plans invest about 5% more in equities than do similar plans without benefit guarantees.