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

Published online by Cambridge University Press:  31 October 2012

FERNANDA BROLLO  and
TOMMASO NANNICINI
FERNANDA BROLLO*
Affiliation:
University of Alicante
TOMMASO NANNICINI*
Affiliation:
Bocconi University
*
Fernanda Brollo is Assistant Professor, Department of Economics, University of Alicante, 03690 San Vicente del Raspeig, Alicante, Spain ([email protected]).
Tommaso Nannicini is Assistant Professor, Department of Economics, Bocconi University; also Research Affiliate–IGIER, Milan, and Research Fellow–IZA, Bonn; Via Rontgen, 1 – 5th Floor, Office D1.16, 20136 Milan, Italy ([email protected]).
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Abstract

This article uses a regression discontinuity design in close electoral races to disclose purely political reasons in the allocation of intergovernmental transfers in a federal state. We identify the effect of political alignment on federal transfers to municipal governments in Brazil, and find that—in preelection years—municipalities in which the mayor is affiliated with the coalition (and especially with the political party) of the Brazilian president receive approximately one-third larger discretionary transfers for infrastructures. This effect is primarily 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.

Type
Research Article
Information
American Political Science Review , Volume 106 , Issue 4 , November 2012 , pp. 742 - 761
Copyright
Copyright © American Political Science Association 2012

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