Electoral Incentives and Public Education Spending: Evidence from Brazil

This paper provides evidence against the argument that the rich prevent the poor from obtaining public education in unequal developing democracies. In Brazilian municipalities with low median incomes, voters are significantly less likely to reelect incumbent candidates from parties that increased the number of local public primary schools during their terms. This is not true for municipalities with high median incomes. A new survey asking subjects directly whether improving public education or increasing cash transfers is more important for the government to achieve shows that the poor prefer cash transfers significantly more than do higher-income individuals. We introduce randomized information shocks in the same survey to respondents on how their local government allocated resources in previous years. One of the information shocks reports increases in public education spending accompanied by decreases in public expenditures associated with cash transfers. That shock significantly worsens the assessment of the current government for respondents with low incomes, while it significantly improves it for those with high incomes. These findings suggest that many democratic developing countries with high levels of income inequality might have low levels of public education spending because the poor prefer the government to spend resources elsewhere. JEL Classification: C90, D31, H52, H53, I28, O15