proportion rural. The large t-statistic on the FONCODES index in columns (i) and (ii) suggests that it is important that the relationship between expenditures and the index be specified correctly. To account for possible non-linearities in this relationship, I include a Fourier senres expansion of the FONCODES index in column (iii).<sup>22</sup> In addition, this regression includes numerous socio-economic controls listed at the foot of the table, and a dummy variable for border provinces. This border dummy is included as a control because FONCODES may have spent differently in areas near the volatile Ecuadorian border. Finally, the specification in column (iii) includes 25 department-level dummies. FONCODES' regional offices generally correspond to departments, and these dummies are meant to capture differences in institutional capacity across offices, as well as any other possible department-level differences.

|**Table 3: The impact of the second-r**<br>**capita**FONCODES**expenditures on c**|**ound 1990 presidential el**<br>**ommunity-based projec**|**ection on the dist**<br>**ts, December 199**|**ribution of per**<br>**1-October**1993|
|---|---|---|---|
||(i)|(ii)|(iii)|
|Percent vote for Fujimori|0.023***<br>(2.59)|0.028***<br>(3.02)|0.023**<br>(2.07)|
|Abs. value (%/. for Fujimori-50)|-0.002<br>(0.24)|-0.010<br>(0.94)|-0.030**<br>(2.11)|
|In (FONCODES index)|0.696***<br>(6.07)|0.456***<br>(2.61)|--|
|In (population)|--|-0.046<br>(0.58)|0.179***<br>(2.63)|
|Percent rural||0.006<br>(1.64)|-0.002<br>(0.28)|
|Additional controls|No|No|Yes|
|F-test|9.61***|11.85***|2.34*|
|R-squared|0.434|0.445|0.761|
|Number of observations|205|205|205|

> *indicates significance at the 10% level; **indicate **s** ignificance at the 5% level; ***indicates significance at the 1% level.

Note: Absolute t-statistics are reported in brackets, and are based on heteroskedasticity-consistent standard errors. An F-test on both political variables is also reported. A constant was calculated but not reported.

Additional controls: A Fourier series expansion of the FONCODES index, province-level averages for the age of the household head, the average number of years of schooling of household members, the occupation of all adults in the household, separate variables for the proportion of households who own a car, a refrigerator, color TV, and black and white TV, the proportion of the population that is indigenous (defined as those whose mother tongue is a language other than Spanish), the infant mortality rate, a dummy variable for border provinces, and twenty-five departmental dummies.

22 A Fourier series expansion of the FONCODES index includes terms for the log of the FONCODES index, its square, the sine of the log of the index and the sine of twice the log of the index, the cosine of the log of the index and the cosine of twice the log of the index. As usual, the logarithm of the FONCODES index had to be re-scaled to prevent values smaller than -x or larger than i. The coefficient on the FONCODES index is not reported in column (iii) in Table 3, or in columns (iii) and (vi) in Table **_5_** because it is meaningless on its own when the square, sine and cosine parameters are included in the regression.

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