The aim of this article is to identify which variables explain the allocation of discretionary intergovernmental transfers in contexts characterized by fiscal centralization and party system denationalization. To achieve this objective, hypotheses derived from three sets of answers identified in the literature—equity considerations, structural characteristics which increase the subnational unit bargaining power and the national government strategic behavior in relation to subnational governments— are tested using data from the Argentine in the 2002-2011 period. The relevance of the case comes from the particularities of Argentine fiscal federalism, the great variation in the amount received by the subnational units and from the way in which the period characteristics impacted on the political actors incentives. Thus, the article studies the whole set of discretionary transfers during a period not yet systematically studied and finds that its distribution is mainly explained by the national government strategic considerations.