Electoral rules, political competition and fiscal expenditures: regression discontinuity evidence from Brazilian municipalities

Arbeitspapier

We exploit a discontinuity in Brazilian municipal election rules to investigate whether political competition has a causal impact on policy choices. In municipalities with less than 200,000 voters mayors are elected with a plurality of the vote. In municipalities with more than 200,000 voters a runoff election takes place among the top two candidates if neither achieves a majority of the votes. We show that the possibility of runoff increases political competition. We use the discontinuity as a source of exogenous variation to infer causality from political competition to fiscal policy. Our results suggest that political competition induces more investment and less current expenditures, particularly personnel expenditures. The impact of political competition is larger when incumbents can run for reelection, suggesting incentives matter insofar as incumbents can themselves remain in office.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 4658

Classification and Topics

• Classification: Wirtschaft ; State and Local Budget and Expenditures ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Semiparametric and Nonparametric Methods: General
• Subject: Electoral systems ; political competition ; regression discontinuity ; fiscal expenditures ; Kommunale Finanzpolitik ; Public Choice ; Kommunalwahl ; Wahlsystem ; Schätzung ; Brasilien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chamon, Marcos ; de Mello, João M. P. ; Firpo, Sergio
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/36118
• Last update: 10.03.2025, 11:42 AM CET