DEPARTMENT OF ECONOMICS

Working Paper

UNIVERSITY OF MASSACHUSETTS AMHERST

UMass Amherst Economics Papers

Partisanship and local fiscal policy: evidence from Brazilian cities

Raphael Gouvea Daniele Girardi

Working Paper 2019-06

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;Bp2M #v

β = limml↓0

E[y|ml]− limml↑0

E[y|ml] URV

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+�M/B/�i2X

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q2 2biBK�i2 β i?`Qm;? i?2 7QHHQrBM; _. bT2+B}+�iBQM,

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d

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-2

0

2

4

6

Spen

ding

per

cap

ita

-50 -40 -30 -20 -10 0 10 20 30 40 50

Left margin of victory

Local averagesFitted

U�V aT2M/BM; T2` +�TBi�

-2

-1

0

1

2

Spen

ding

(% o

f GDP

)

-50 -40 -30 -20 -10 0 10 20 30 40 50

Left margin of victory

Local averagesFitted

U#V aT2M/BM; UW Q7 :.SV

-2

0

2

4

6

Reve

nues

per

cap

ita

-50 -40 -30 -20 -10 0 10 20 30 40 50

Left margin of victory

Local averagesFitted

U+V _2p2Mm2b T2` +�TBi�

-2

-1

0

1

2

Reve

nues

(% o

f GDP

)

-50 -40 -30 -20 -10 0 10 20 30 40 50

Left margin of victory

Local averagesFitted

U/V _2p2Mm2b UW Q7 :.SV

1tT2M/Bim`2b +QKTQbBiBQM Ub?�`2bV

-1.5

-1

-.5

0

.5

1

Curre

nt e

xpen

ditu

re s

hare

-50 -40 -30 -20 -10 0 10 20 30 40 50

Left margin of victory

Local averagesFitted

U2V *m``2Mi 2tT2M/Bim`2b

-1

-.5

0

.5

1

Publ

ic in

vest

men

t sha

re

-50 -40 -30 -20 -10 0 10 20 30 40 50

Left margin of victory

Local averagesFitted

U7V AMp2biK2Mi

-1

-.5

0

.5

1

Pers

onne

l sha

re

-50 -40 -30 -20 -10 0 10 20 30 40 50

Left margin of victory

Local averagesFitted

U;V S2`bQMM2H

-1

-.5

0

.5

1

Soci

al e

xpen

ditu

res

shar

e

-50 -40 -30 -20 -10 0 10 20 30 40 50

Left margin of victory

Local averagesFitted

U?V aQ+B�H 2tT2M/Bim`2bLQi2b, oBbm�H T`2b2Mi�iBQM Q7 Qm` _. 2biBK�i2b Q7 i?2 2z2+i Q7 � H27i@rBM; K�vQ`- `2TQ`i2/ BM +QHmKM R Q7 i�#H2

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ky

6B;m`2 k, 1z2+i Q7 � H27i@rBM; K�vQ` QM bQ+B�H bT2M/BM;

"�b2HBM2 Ur?QH2 b�KTH2V

-4

-2

0

2

4

Soci

al e

xpen

ditu

res

p.c.

-20 -15 -10 -5 0 5 10 15 20

Left margin of victory

Local averagesFitted

-1

-.5

0

.5

Soci

al e

xpen

ditu

res

shar

e

-20 -15 -10 -5 0 5 10 15 20

Left margin of victory

Local averagesFitted

ǵG�K2@/m+FbǶ bm#b�KTH2

-5

0

5

10

Soci

al e

xpen

ditu

res

p.c.

-20 -15 -10 -5 0 5 10 15 20

Left margin of victory

Local averagesFitted

-2

-1

0

1

2

Soci

al e

xpen

ditu

res

shar

e

-20 -15 -10 -5 0 5 10 15 20

Left margin of victory

Local averagesFitted

ǵPBH@rBM/7�HHbǶ bm#b�KTH2

-10

-5

0

5

10

Soci

al e

xpen

ditu

res

p.c.

-20 -15 -10 -5 0 5 10 15 20

Left margin of victory

Local averagesFitted

-4

-2

0

2

4

Soci

al e

xpen

ditu

res

shar

e

-20 -15 -10 -5 0 5 10 15 20

Left margin of victory

Local averagesFitted

LQi2b, oBbm�H T`2b2Mi�iBQM Q7 Qm` _. 2biBK�i2b Q7 i?2 2z2+i Q7 � H27i@rBM; K�vQ` QM bQ+B�H 2tT2M/Bim`2b T2` +�TBi�UH27iV �M/ �b b?�`2 Q7 iQi�H 2tT2M/Bim`2b U`B;?iV 7Q` 2�+? bm#b�KTH2- �b `2TQ`i2/ BM +QHmKMb R- k �M/ 8 Q7 i�#H2R �M/ #�b2/ QM i?2 bT2+B}+�iBQM BM 2[m�iBQM kX �HH Qmi+QK2b �`2 9@v2�` i2`K �p2`�;2b- `2bB/m�HBx2/ QM +Biv �M/v2�` }t2/@2z2+ibX 6Bii2/ HBM2b �`2 2biBK�i2/ b2KB@T�`�K2i`B+�HHv i?`Qm;? F2`M2H@r2B;?i2/ HQ+�H HBM2�` `2;`2bbBQMUi`B�M;mH�` F2`M2HV- rBi? Ja1@QTiBK�H #�M/rB/i?X a22 K�BM i2ti 7Q` /2}MBiBQM �M/ BMi2`T`2i�iBQM Q7 i?2 bm#b�KTH2bX

kR

6B;m`2 j, aQ+B�H 2tT2M/Bim`2 2z2+ib #v v2�` BM Q{+2

-20

24

68

Socia

l exp

endi

ture

sha

re

Term average 1st 2nd 3rd 4thYear in Office

Baseline Lame ducks subsample Oil windfall subsample

LQi2b, 1z2+i Q7 � H27i@rBM; K�vQ` QM i?2 b?�`2 Q7 bQ+B�H bT2M/BM; 7`QK Qm` _. bT2+B}+�iBQM U2[m�iBQM kV- mbBM; i?2

`Q#mbi �M/ #B�b@+Q``2+i2/ T`Q+2/m`2 Q7 *�HQMB+Q 2i �HX UkyR9V �M/ +QMi`QHHBM; 7Q` +Biv �M/ v2�` }t2/ 2z2+ibX "�`b

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kk

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0

5

10

15

Perc

ent

-4 -2 0 2 4t-stats from placebo thresholds

LQi2b, 1KTB`B+�H /Bbi`B#miBQM Q7 i@bi�iBbiB+b 7`QK Qm` _. 2biBK�i2b U2[m�iBQM kV Q7 i?2 2z2+i Q7 � H27i@rBM; K�vQ` QM

i?2 b?�`2 Q7 bQ+B�H bT2M/BM;- #�b2/ QM kyy `�M/QKHv@/`�rM TH�+2#Q i?`2b?QH/b- /`�rM b2T�`�i2Hv QM i?2 H27i �M/ QM

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k8 Q#b2`p�iBQMb QM 2�+? bB/2 Q7 i?2 #�M/rB/i?X o2`iB+�H HBM2 4 i@bi�iBbiB+b Q#i�BM2/ mbBM; i?2 i`m2 i?`2b?QH/X h?2

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kj

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0.0

05.0

1.0

15.0

2.0

25

-60 -40 -20 0 20 40Left margin of victory

point estimate 95% C.I.

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