Thursday, March 10, 2005

effective porkbarelling.

Andrew Leigh shows a statistically significant positive relationship between government expenditure on the Roads to Recovery program and electoral swings towards the coalition in the 2004 election*. All he has done is regressed electoral swings with regards to road expenditure, and found a significant positive relationship, leading him to estimate the cost of a swinging voter at around $28,000.

This was obviously inspired by Monday's piece in the same paper, where Mark Davis pointed out that;
“The analysis of $1.2 billion in federal funds allocated to local councils during the first four years of the program shows that the electorates that gained the most include Transport Minister John Anderson's constituency of Gwydir in northern NSW, which received $41 million under the scheme.”

John “I didn't really offer him a diplomatic posting, because I am just an honest farmer and wouldn't do that sort of thing” Anderson, concerned about how there are so many stories flying around about his dubious character that it is impossible to keep up with all of them, came back hard on Tuesday, saying that;
“The Australian Financial Review's myopic approach to infrastructure spending plagues its pages.”

“[E]very dollar spent by the government on the Roads to Recovery program generates $1.80 in benefits.”

And what are these benefits, John? Where did you pull that figure from?

It will be interesting to see how John Anderson reacts to Andrew Leigh's argument. Leigh acknowledges that the correlation between the two doesn't mean causality, and this may just be coincidental. There certainly some circumstantial factors involved here - the coalition generally has a stronger showing in regional seats that have greater distances involved and therefore need more roads. Nevertheless, as Leigh says;
“[T]he correlation suggests that the program was largely targeted towards coalition-held seats, and voters in these favoured seats responded by voting for John Howard in larger numbers than in 2001.”

Whatever the case, it is quite apparent that the process of allocating road funds has some questions hanging over it, and, as pointed out in the AFR's own response to Anderson's rant;
“[The Minister for Transport] protested too much in his cri de coeur ... yesterday, but he unwittingly demonstrated that the government's road spending programs - the $12 billion AusLink and the $2.7 billion Roads to Recovery - are still not transparent enough for taxpayers to have any confidence that their hard-earned money is being well spent.”

Mr Anderson, I think that you need a better reason for why coalition seats got consistently more money than simply saying that they are in the bush, and I would like to hear the justification for why your electorate got the most in the country. And while you are at it, I would like to see some justification for the returns on road investment that you are quoting.

*A longer article is published in today's Fin Review, but if you are not a subscriber, you can see Andrew Leigh's op-ed pieces (which are always worth reading) here.


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