Beneficiaries from Federal Transfers to Municipalities The Case of Israel

In this paper we have shown which variables affect the size of grants given by the government to cities in Israel. We have also shown that aside from demographic variables, which alone account for a very large portion of the variance, there is also a political residual effect, where cities with mayors who are members of the “in” political party fared better than other cities. This effect is felt mainly through the general, and not the earmarked, portion of the grant, and was more prevalent when the Likud was in power than when Labor ruled.