UBC Theses and Dissertations

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UBC Theses and Dissertations

The local political economy of conditional cash transfers in Brazil Frey, Anderson


Conditional cash transfers (CCT) are currently one of the most popular poverty reduction policies worldwide. Nevertheless, there is still limited evidence of their impact on the local political dynamics of developing nations plagued by corruption, clientelism, and vote buying. This thesis studies this issue using data from Brazil's Bolsa Família, the largest CCT program in the world. Abstract Chapter 2 proposes a theoretical mechanism to illustrate how a CCT program could affect local politics in such institutional setting, when local politicians cannot manipulate program eligibility. In a nutshell, when mayors are able to buy votes by diverting public resources into private payments to swing voters, a CCT program works as an income shock that reduces the voter's marginal utility coming from vote buying. Abstract Chapter 3 uses data from Brazil's Bolsa Família to test the theoretical predictions from the first Chapter. It shows that, when transfers are shielded from the influence of political intermediaries, they trigger a reduction in incumbency advantage, an increase in both political competition and the quality of candidates, and a reduction in the support for high-clientelism parties. Transfers also lead incumbents to shift spending toward redistributive health and education services. These results are estimated with a nonparametric multivariate regression discontinuity design. Abstract Despite of the improvements brought out by the CCT program, when politicians can control access to the program, some of these political impacts might be negative in the short-term. Chapter 4 tells this other side of the story: what happens when politicians are able to manipulate program enrollment. Using administrative data from the Bolsa Família registry, and a regression discontinuity design in close elections, this Chapter shows that mayors with reelection incentives are more likely to promote income underreporting fraud by households, for the purpose of eligibility to CCT. This fraud is rewarded by voters, as corrupt mayors have a higher reelection probability. Finally, the Chapter also shows the need for disciplining devices to reduce this type of corruption. A higher risk of audits by the federal government is shown to drastically reduce the effects of reelection incentives on fraud.

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