The Impact of the Local Government Institutional Framework on the Distribution of Intergovernmental Grants: Greek Republic as a Case Study

Abstract

The article analyses grant allocation from central governments to municipalities in Greece during the period 2003-2010. A quantitative analysis is based on two simple models that include normative socioeconomic and institutional factors. Data of 970 municipalities and 50 prefectures of Greece over the period 2003-2010 clearly show that institutional variables such as years of general elections and prefect’s experience exert more influence on grant allocation than normative variables such as GDP per capita. A substantial transfer of competences from central to local government could significantly ameliorate local tax revenues.