Tying Your Enemy’s Hands in Close Races: The Politics of Federal Transfers in Brazil
AbstractThis paper uses a quasi-experimental strategy to disclose utterly political reasons behind the allocation of intergovernmental transfers in a federal state. We apply a regression discontinuity design in close elections to identify the effect of political alignment on federal transfers to municipal governments in Brazil. We find that municipalities where the mayor is affiliated with the coalition of the Brazilian President receive larger (discretionary) infrastructure transfers by about 40% in preelection years. This effect is mainly driven by the fact that the federal government penalizes municipalities run by mayors from the opposition coalition who won by a narrow margin, thereby tying their hands for the next election.
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Bibliographic InfoPaper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 358.
Date of creation: 2010
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Other versions of this item:
- Brollo, Fernanda & Nannicini, Tommaso, 2011. "Tying Your Enemy’s Hands in Close Races: The Politics of Federal Transfers in Brazil," IZA Discussion Papers 5698, Institute for the Study of Labor (IZA).
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-30 (All new papers)
- NEP-CDM-2010-01-30 (Collective Decision-Making)
- NEP-POL-2010-01-30 (Positive Political Economics)
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