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

  • Brollo, Fernanda

    ()

    (Universidad de Alicante)

  • 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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5698.

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Length: 49 pages
Date of creation: May 2011
Date of revision:
Publication status: published in: American Political Science Review, 2012, 106 (4), 742-761
Handle: RePEc:iza:izadps:dp5698
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  1. Alain de Janvry & Frederico Finan & Elisabeth Sadoulet, 2010. "Local Electoral Incentives and Decentralized Program Performance," NBER Working Papers 16635, National Bureau of Economic Research, Inc.
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