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

  • FERNANDA BROLLO (a1) and TOMMASO NANNICINI (a2)
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.

Copyright
Corresponding author
Fernanda Brollo is Assistant Professor, Department of Economics, University of Alicante, 03690 San Vicente del Raspeig, Alicante, Spain (fernanda.brollo@merlin.fae.ua.es).
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 (tommaso.nannicini@unibocconi.it).
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American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
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