Working Paper: NBER ID: w25501
Authors: Klenio Barbosa; Fernando V. Ferreira
Abstract: We study the causes and consequences of patronage in Brazilian cities since the country’s re-democratization. Our data consist of the universe of local public sector employees merged with their party affiliations, and a dynamic regression discontinuity design is applied to deal with the endogeneity of patronage. Elections have consequences for patronage, with winning political coalitions increasing their shares of public sector workers and wages by 3-4 percentage points during a mayoral term, and also occupying civil servant jobs to perform key service-oriented tasks in education and public health. This type of patronage accounts for more than half of the dramatic increase in public sector political employment since the Brazilian re-democratization. The political occupation of government jobs is not associated with ideology, though. Instead, lack of accountability and rent-seeking are the primary driving forces, while reliance on intergovernmental transfers only increases patronage for smaller cities. Finally, we estimate the long-term consequences of this political occupation for fiscal outcomes conditions and for the quality of education and health care services. More political occupation does not affect the size of local governments, but it changes the composition of expenditures and public workers: the hiring of politically connected workers crowds out, practically one-to-one, non-affiliated teachers and doctors. The increased political occupation in Brazilian cities resulted in negative long term outcomes for local citizens in the form of less years of formal schooling and higher mortality rates.
Keywords: patronage; public sector; Brazilian cities; democracy; public service quality
JEL Codes: D72; D73; H70; J45; M5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lack of accountability and rent-seeking behavior (D73) | Patronage (I38) |
| Winning political coalitions in Brazilian cities (D79) | Increase in shares of public sector workers (J45) |
| Winning political coalitions in Brazilian cities (D79) | Increase in wages of public sector workers (J38) |
| Political occupation of government jobs (J45) | Increase in public sector political employment (J45) |
| Increased political occupation (P16) | Decrease in educational attainment (I21) |
| Increased political occupation (P16) | Increase in child mortality (J13) |