| Abstract: | This study seeks to advance our understanding of the institutionalunderpinnings of federalism by evaluating William H. Riker'sstudy of party causality. Using data from federal funds transfersin Argentina, a federation exhibiting high levels of fiscaldecentralization despite its centralized party system, it isshown that when governorships are held by opposition parties,the overall amount of federal funds transferred to provincesincreases considerably. In addition, changes in the partisancomposition of the national government are also associated withsteep increases in the share of provincial federal funds, whereas,more controversially and challenging prominent recent studiesof decentralization in Latin America, divided government atthe national level leads to centralization of intergovernmentalfunds. These findings support Riker's contention that politicalparties exercise a decisive influence over the distributionof fiscal powers between states and the national government. |
