This paper provides regression discontinuity evidence on development
impacts of intergovernmental transfers. Extra transfers in Brazil
increased local government spending per capita by about 20 percent
over a 4 year period with no evidence of crowding out own revenue or
other revenue sources. Schooling per capita increased by about 7 percent
and literacy rates by about 4 percentage points. In line with the
effect on human capital, the poverty rate was reduced by about 4 percentage
points. Somewhat noisier results also suggest that the reelection
probability of local incumbent parties in the 1988 elections improved
by about 10 percentage points.
Litschig, Stephan, and Kevin M. Morrison.
"The Impact of Intergovernmental Transfers on Education Outcomes and Poverty Reduction."
American Economic Journal: Applied Economics,
State and Local Budget and Expenditures
State and Local Government: Health; Education; Welfare; Public Pensions
Analysis of Education
Education: Government Policy
Measurement and Analysis of Poverty
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Economic Development: Human Resources; Human Development; Income Distribution; Migration