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Tying Your Enemy’s Hands in Close Races: The Politics of Federal Transfers in Brazil


  • Brollo, Fernanda

    () (University of Warwick)

  • Nannicini, Tommaso

    () (Bocconi University)


This 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 pre-election 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.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp5698

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    References listed on IDEAS

    1. Alain de Janvry & Frederico Finan & Elisabeth Sadoulet, 2012. "Local Electoral Incentives and Decentralized Program Performance," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 672-685, August.
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    political alignment; regression discontinuity; federal transfers;

    JEL classification:

    • 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

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