What You See and What You Get: Direct and Indirect Political Dividends of Public Policies

We investigate both direct and indirect political dividends of public policies by examining \emph{Minha Casa, Minha Vida}, a housing program in Brazil that selects beneficiaries through a lottery. We surveyed lottery participants and found that winners are not more likely to support incumbents. Yet nonbeneficiaries, a much larger group than beneficiaries, are aware of the program and evaluate it very well and that beneficiaries' direct experiences with the program is sometimes underwhelming. Furthermore, politicians consider the program an electoral asset, and difference-in-differences analysis of electoral results leveraging the roll-out of the program across municipalities finds that presidential and mayoral incumbent candidates had better electoral performance in localities that implemented MCMV. Overall, when beneficiaries are a relatively small group, benefits are conspicuous, and a program's objectives are widely supported, government programs can create electoral payoffs independently of how programs are perceived or experienced by beneficiaries.