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Investment capacity and the electoral marketplace: evidence from Brazil

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fiscal_capacity.pdf (647.9Kb)
Date
2019
Author
Araújo, Victor
Izumi, Maurício
Limongi Neto, Fernando Papaterra
Mignozzetti, Umberto G.
Metadata
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Abstract
The importance of money in elections is a hallmark of contemporary democracies. In this paper, we study how investment capacity, defined as the resources remaining after the municipality perform the mandatory expenditures, influences elections in Brazil. We theorize that when a politician wins the election in a low investment capacity municipality, this generates commitment problems, as new mayors are unable to reward the firms that contributed to their campaigns, influencing the next elections. We test these claims by considering a close-elections regression discontinuity design coupled with heterogeneous quantile effects for Brazilian municipalities between 2000 and 2012. We find that incumbent mayors in towns with low investment capacity receive less campaign donation afterward and are more disadvantaged in their reelection contests. The results are robust to design variations and changes in party labels or mayoral characteristics. Our findings have implications for the influence of money on politics in democratic countries.
URI
https://hdl.handle.net/10438/28637
Collections
  • Projeto FAPESP Relação entre o tamanho de legislaturas e bem-estar no Brasil / RP [4]
  • Rede de Pesquisa - Papers [220]
Knowledge Areas
Administração pública
Subject
Eleições - Custos - Brasil
Brasil - Política e governo
Keyword
Investment capacity
Campaign contributions
Incumbency effects
Close-elections regression discontinuity design
Brazil

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