Electoral Incentives and the Allocation of Public Funds

Frederico Finan and Maurizio Mazzocco

Journal of the European Economic Association, 2021, vol. 19, issue 5, 2467-2512

Abstract: Politicians allocate public resources in ways that maximize political gains, and potentially at the cost of lower welfare. In this paper, we quantify these welfare costs in the context of Brazil’s federal legislature, which grants its members a budget to fund public projects within their states. Using data from the state of Roraima, we estimate a model of politicians’ allocation decisions and find that 26.8% of the public funds allocated by legislators are distorted relative to a social planner’s allocation. We then use the model to simulate three potential policy reforms to the electoral system: the adoption of approval voting, imposing a one-term limit, and redistricting. We find that a one-term limit and redistricting are both effective at reducing distortions. The one-term limit policy, however, increases corruption, which makes it a welfare-reducing policy.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://hdl.handle.net/10.1093/jeea/jvaa055 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Electoral Incentives and the Allocation of Public Funds (2016)
Working Paper: Electoral Incentives and the Allocation of Public Funds (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:19:y:2021:i:5:p:2467-2512.

Access Statistics for this article

Journal of the European Economic Association is currently edited by Romain Wacziarg

More articles in Journal of the European Economic Association from European Economic Association
Bibliographic data for series maintained by Oxford University Press ().