Abstract

This paper disentangles the main factors conditioning the levels and composition of public expenditures on a large panel of Brazilian municipalities. Using the IMF’s classification of expense by functions of government, it is possible to analyze how personal characteristics of Brazilian mayors influence the fiscal policy. Empirical results suggest that expenditures increase during the year before election years. During local election years, there is no evidence of an opportunistic manipulation of expenditure composition. However, in the year before local election, mayors favor items highly visible and appreciated by the electorate, such as housing and community amenities, and recreation, culture, and religion. Political alignment with matters both for the level and weights of expenditures by function. Mayors’ ideology is associated with lower weight of recreation, culture, and religion. Ideology, gender, university education and party similarity with higher levels of government are relevant at local election years. We also find demographic and socioeconomic characteristics of municipalities influence the level of expenditures.

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