Partisanship and local fiscal policy: Evidence from Brazilian cities

Raphael Gouvêa and Daniele Girardi

Journal of Development Economics, 2021, vol. 150, issue C

Abstract: We study the role of partisanship in shaping local fiscal policy in Brazilian cities in the 2004–2016 period. Using a regression-discontinuity design, we find no effect of left-wing mayors on the size of the city government. We find a modest but robust positive effect of approximately 0.6 percentage points on the social expenditures share, which translates in a small (approximately 1 percent) increase in social expenditure per capita. The impact of left-wing mayors on social spending is stronger in the 2004–2008 ‘boom years’, for lame-duck mayors and in cities receiving oil windfalls. These results suggest that Brazilian parties attempt to shape the allocation of municipal resources to favor their respective electoral bases but their ability to do so is severely limited by factors such as institutional constraints and re-election concerns.

Keywords: Local fiscal policy; Political economy; Partisanship; Brazilian cities; Regression-discontinuity design (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:150:y:2021:i:c:s030438782100016x

DOI: 10.1016/j.jdeveco.2021.102637

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