Political Fragmentation and Coalition Alignment effects: Evidence from health Transfers to Italian Regions

Do government parties positively discriminate in favor of swing or aligned sub-national units while allocating public resources? This paper integrates these two strands of the literature and makes a new contribution by incorporating the insightful perspective of the political fragmentation approach. Using a dataset of Italian regions between 2001 and 2011 constructed from primary sources and a new index of fractionalization, based on Golosov (Party Politics 16(2):171-192), we empirically find that it is the fragmentation of the aligned recipient government that affects the final amount of resources, rather than the alignment itself. Quasi-formula-based grants do not remove the arbitrariness that allows for politically motivated targeting.