Upwardly Mobile: Subnational Term Limits and Political Budget Cycles in Brazil

• In Event: The Political Economy of Voting

Abstract

We examine the logic driving political budget cycles at the subnational level. We argue that subnational leaders have an incentive to engage in election-oriented fiscal policy decisions, regardless of their eligibility for reelection. In decentralized political systems where subnational executives can seek reelection to current offices as well as aspire to other political posts, they have an incentive to preserve their reputations for strong governmental performance, regardless of whether they are eligible for reelection. For those subnational leaders ineligible for reelection, strong governmental performance can raise support for their parties’ candidates, thereby ensuring the profile of subnational leaders among voters and therefore among party leaders responsible for helping them rotate to new political posts. We test this argument using time-series cross-sectional fiscal spending measures (total, type) from state-level Brazil. Different Autoregressive Distributed Lag model specifications (random effects, state fixed effects, state-clustered standard errors, panel corrected standard errors), GMM, and mixed-effects models) of this data show that (1) incumbents raise expenditures ahead of elections and that (2) there is no difference in spending between incumbents eligible and ineligible for reelection.

Authors

• Allyson L. Benton, University of Essex

• Lorena G. Barberia, University of São Paulo