Determinants of fiscal transfers to municipal units: effects of malapportionment of brazilian electoral districts

Abstract The disproportionate representation of electoral districts has an effective influence on the distribution of public resources to the overrepresented regions, which shows that public spending is driven by political and institutional factors. Therefore, the objective of this article is to analyze the products of institutional factors, notably disproportionate non-legislative representation on the transfers to Brazilian municipalities. We used statistical econometric regression with panel data. Brazilian municipalities were analyzed considering the period from 2004 to 2014. The results indicate that the effect of malapportionment in the National Congress on discretionary federal and state expenditures is significant, which demonstrates that the representation structure guides political motivation and the actions of Brazilian public management.