Does enfranchisement affect fiscal policy? Theory and empirical evidence on Brazil

Rodrigo Schneider, Diloá Athias () and Mauricio Bugarin ()
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Diloá Athias: Development Pathways
Mauricio Bugarin: University of Brasilia

Economics of Governance, 2019, vol. 20, issue 4, No 4, 389-412

Abstract: Abstract This paper studies the effect of political participation on public spending at the local level in Brazil. In particular, we look at the phased-in implementation of electronic voting in the late 1990s—which enfranchised poorer voters by decreasing the number of invalid votes—to identify the causal effect of political participation on public spending. We build a theoretical political economy model which allows voters to cast, not purposefully, an invalid vote, and show that when poorer voters’ likelihood of casting a valid vote increases, public social spending increases as well. We test this prediction empirically using a difference-in-differences model where municipalities using electronic voting constitute our treatment group. We find that an increase of 1 percentage point in the valid vote to turnout ratio for state representatives increases health spending by 1.8%; education by 1.4%; public employment by 1.25%; intergovernmental transfers by 1%; and local taxes by 2.6%.

Keywords: Electronic voting; Political participation; Social public spending; Difference-in-differences (search for similar items in EconPapers)
JEL-codes: H21 H4 H5 H7 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s10101-019-00230-6

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