A Influência da Reeleição nas Políticas Fiscais Subnacionais

Abstract This paper presents an empirical investigation on the potential effect of the end of the executive branch’s reelection on municipalities’ public finances. An econometric analysis based on a panel of Brazilian cities from the year 2001 up to 2012 shows that first-term mayors that compete for reelection are more fiscally responsible when compared to second-term mayors or first-term mayors that don’t compete for reelection. This result confirms the existing literature on career concerns, which suggests that reelection works as an instrument that voters can use in order to control the fiscal behavior of elected executive incumbents. Moreover, it highlights the risk of excessive subnational budgetary deficits in case reelection is forbidden in Brazil.