This paper analyzes the economic returns to political connections in Brazilian local elections, focusing not only on traditional campaign donations but also on two novel channels: firms that provide goods or services to candidates during campaigns and firms’ owners affiliated with parties within a coalition running for mayor. Employing regression discontinuity and event study methods around close mayoral races, we find that politically connected firms substantially increase both their likelihood of securing procurement contracts and the value of those contracts, though without corresponding gains in employment or wages. This paper contributes to the literature on political connections by documenting the emergence of indirect political connections and public procurement allocation in a context of weak institutional constraints.
Download the paper in PDF format
Lucas Braga de Melo and Valdemar Pinho Neto
View all the NICEP working papers
University of Nottingham Law and Social Sciences Building University Park Nottingham, NG7 2RD
telephone: +44 (0)115 84 68135 email: nicep@nottingham.ac.uk