Last modified: 28-09-2011
Abstract
Legislative expenditures are likely to be endogenously correlated with legislative competition: higher legislative disbursement might make reelection of representatives easier but, on the other hand, higher legislative reelection may cause experienced legislators to manipulate public expenditures for their own benefits. This paper aims at investigating how legislative spending affect the competition for legislative seats in Brazilian municipalities by exploring a discontinuity in the amount of legislative expenditures (relative to total public revenues) based on their population size. Our regression discontinuity results provide evidence that lower legislative expenditures do not affect reelection rates, but do increase the dispersion of votes among the candidates.