A long-standing issue in political economics is whether party control makes a difference in determining fiscal and economics policies. This question is very difficult to answer empirically since parties are not randomly selected to govern political entities. This paper uses a...

We first study theoretically how intergovernmental relations affect political budget cycles (PBCs) within federal countries, introducing a national incumbent that favors aligned districts in a model where discretionary fiscal policy is subject to credibility problems. Then we analyze Argentina's...