appears to have been rather good, in the sense of targeting those regions with large populations of poor people.

Census data are also exploited to construct proxies for different types of infrastructure “need” at the level of each _parroquia_ , namely the percentage of households in each community that have no access to any toilet facilities, the percentage of households with access to piped water supply, and the percentage of children (5-12 year olds) enrolled at school.<sup>25</sup> Following Schady (2000), we acknowledge the possible effect of electoral considerations by the party in office at the central government level on the distribution of FISE expenditures. As with Social Funds in many countries, the FISE was an independent agency set up in parallel to established ministries of the government and, in Ecuador, it was essentially run out of the President’s office. It certainly is conceivable that a project such as FISE might be used by the Presidency for purposes other than the official objectives of the project – characterizing capture at the central, rather than local, level. To account for this possibility, we examine province-level results from the second round of the 1992 presidential elections, as published by the _Tribunal Supremo Electoral Ecuatoriano_ , the agency overseeing the electoral process in Ecuador. This election was the last national election prior to the creation of FISE, and the Social Fund was in fact launched during the administration of PUR (Partido Unidad Republicana), which won that election. We calculate the share of votes obtained by the incumbent party (the PUR) in each province. The higher this percentage, the more inclined the central government might be to “reward” the province with FISE funding of some kind.<sup>26</sup> Descriptive

> 25 Additional control variables capture geographic differences. The first is the distance of each _parroquia_ from Quito, the capital of Ecuador and seat of the central government. This variable was computed as a linear distance (in kilometers), using the geographic coordinates of the _parroquias_ . It is an imperfect estimate of proximity, as it does not measure actual travel time between two locations. Data on geographic coordinates was obtained from the _Sistema Integrado de Indicadores Sociales_ del Ecuador, SIISE and it did not include all of the _parroquias_ of Ecuador. For locations for which no geographic coordinates were available, we imputed those of the closest _parroquia_ , based on visual inspection of a map. A second geographic variable takes the value of 1 if the _parroquia_ is the administrative capital of the canton it is in. Such parroquias are plausibly more closely connected to the government than others.

26 A second electoral variable that was calculated was the absolute deviation of the presidential vote in a particular province from 50%. This measure aims to capture the “non-marginality” of a particular province from a political point of view. As argued by Dixit and Londregan, (1996), the central government might wish to influence voting behavior in “swing” provinces – provinces in which either its majority is precarious, or it is not far from gaining a majority – through strategic allocations of FISE resources. The more “non-marginal” a province, on the basis of this argument, the less likely the province would receive a 21