The Relationship between Political Allyship and Agriculture Subsidies: Evidence from Taiwan

This study examines how political alignment between local and central governments influences the distribution of agricultural subsidies in Taiwan. Drawing on panel data from 20 regions over the 2004-2023 period, we test predictions from political agency and distributive politics theories. Results show that regions governed by mayors aligned with the president’s party receive significantly larger subsidy shares, especially during Democratic Progressive Party (DPP) administrations. This bias is concentrated in subsidies distributed via agricultural associations, suggesting intentional delegation to vote-mobilizing intermediaries. Contrary to expectations from the core voter model, subsidies are not higher in regions that supported the president electorally. Instead, regions politically opposed to the ruling party receive more support when electoral competitiveness is high consistent with a swing voter strategy. Further, while political donations show no significant relationship, party expenditures are positively associated with subsidy shares, indicating strategic investment over reward. These findings offer robust empirical support for the political economy of intergovernmental transfers and reveal asymmetric party behaviors in distributive politics under Taiwan democratic framework JEL: P26; P35; H53; H71