On the relationship between political alignment and government transfers: triple differences evidence from a developing country

Author(s)

Sakurai, Sergio Naruhiko ^[1] ; Theodoro, Maria Isabel Accoroni ^{[1, 2]}

Affiliation

^[1] Univ Sao Paulo, Ave Bandeirantes N 3900, Ribeirao Preto, SP - Brazil

^[2] Moura Lacerda Univ Ctr, Ribeirao Preto, SP - Brazil

• Document type: Journal article
• Source: EMPIRICAL ECONOMICS; v. 58, n. 3, p. 1107-1141, MAR 2020.
• Web of Science Citations: 1

Abstract

Based on a panel of more than 3300 Brazilian municipalities between 1999 and 2012, this article aims to investigate the influence of the political alignment of municipal governments with the federal government and their respective state governments on the amount of transfers received. In particular, this article utilizes a method that simultaneously explores all sources of variations, namely between municipalities, between years, and between levels of government, entitled triple differences. Although the results suggest that political alignment exerts little influence over the discretionary portion of current transfers, capital transfers appear to be a very important mechanism by which the federal government and state governments support politically strategic local governments. These results are robust to estimations comprising alternative measures of political alignment, a sample comprising a subset of municipalities with no party switching of mayors, estimations controlling for the electoral calendar, and estimations controlling for state-specific trends. (AU)

• FAPESP's process: 08/11336-1 - Political aspects and fiscal performance of Brazilian municipalities
• Grantee: Sergio Naruhiko Sakurai
• Support Opportunities: Regular Research Grants
• FAPESP's process: 14/25855-1 - On the determinants and effects of BNDES financing to Brazilian municipal governments
• Grantee: Sergio Naruhiko Sakurai
• Support Opportunities: Scholarships abroad - Research