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The Political Economy of Enforcing Conditional Welfare Programs: Evidence from Brazil

22 June 2015
San Francesco - Via della Quarquonia 1 (Classroom 2 )
We analyze whether politicians manipulate the enforcement of the rules of social welfare programs to influence electoral outcomes, by studying Bolsa Familia (BFP) in Brazil. BFP provides a monthly stipend to poor families conditional on school attendance. Failure to comply with this requirement results in delayed benefit disbursements and even exclusion from the program. First, we exploit random variation in the timing when different beneficiaries learn about penalties for noncompliance and find that in the 2008 municipal elections the vote share of candidates aligned with the President’s party is lower in zip codes where more beneficiaries received penalties before the elections. Second, using a regression discontinuity design, we find that enforcement of BFP requirements is weaker around the time of elections in municipalities where mayors can run for reelection, consistent with the argument that local electoral incentives may lead mayors to manipulate enforcement. Finally, we provide evidence on a possible mechanism for this manipulation, finding that schools with politically-connected directors tend to excuse insufficient attendance relatively more before the elections, so that beneficiaries face no penalty.
Brollo, Fernanda