Coalitional Distributive Politics

Abstract

This paper provides a theory to explain how political parties influence cabinet portfolios’ targeted discretionary investments in Brazil. Contrary to previous studies that claim presidents centralize allocative decisions for electoral gains, I argue that they share them with coalition parties when they offer portfolios to obtain legislative support. Conversely, coalition parties acquire influence and expertise on portfolio-specific spending, incentivizing local incumbents to request more transfers from portfolios held by co-partisan ministers. Data covering more than twenty years of discretionary investments from cabinet portfolios to municipalities in Brazil and a triple-difference design support the theory. Results show that mayors demand and receive up to one-third more transfers from portfolios administered by co-partisan politicians, an effect that benefits both presidents’ and coalition parties alike. In addition, this effect is greater in election years and among portfolios responsible for local infrastructure. I find no evidence that ministers or their staff directly manipulate the bureaucracy to favor co-partisan mayors. These findings indicate that political parties reap non-programmatic benefits from joining government coalitions in Brazil.