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On the relationship between political alignment and government transfers: triple differences evidence from a developing country

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  • Sergio Naruhiko Sakurai

    (University of São Paulo)

  • Maria Isabel Accoroni Theodoro

    (University of São Paulo
    Moura Lacerda University Centre)

Abstract

Based on a panel of more than 3300 Brazilian municipalities between 1999 and 2012, this article aims to investigate the influence of the political alignment of municipal governments with the federal government and their respective state governments on the amount of transfers received. In particular, this article utilizes a method that simultaneously explores all sources of variations, namely between municipalities, between years, and between levels of government, entitled triple differences. Although the results suggest that political alignment exerts little influence over the discretionary portion of current transfers, capital transfers appear to be a very important mechanism by which the federal government and state governments support politically strategic local governments. These results are robust to estimations comprising alternative measures of political alignment, a sample comprising a subset of municipalities with no party switching of mayors, estimations controlling for the electoral calendar, and estimations controlling for state-specific trends.

Suggested Citation

  • Sergio Naruhiko Sakurai & Maria Isabel Accoroni Theodoro, 2020. "On the relationship between political alignment and government transfers: triple differences evidence from a developing country," Empirical Economics, Springer, vol. 58(3), pages 1107-1141, March.
    • Handle: RePEc:spr:empeco:v:58:y:2020:i:3:d:10.1007_s00181-018-1568-7
    DOI: 10.1007/s00181-018-1568-7
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    Cited by:

    1. Luisa Schneider & Daniela Wech & Matthias Wrede, 2022. "Political alignment and project funding," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(6), pages 1561-1589, December.
    2. Henrique Augusto Campos Fernandez Hott & Sergio Naruhiko Sakurai, 2021. "Party switching and political outcomes: evidence from Brazilian municipalities," Public Choice, Springer, vol. 187(3), pages 403-438, June.

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