Political budget cycles in Santa Catarina’s municipalities

Abstract

This work examines the existence of political budget cycles at the municipal level of the Brazilian state of Santa Catarina. We used annual data for 292 municipalities of Santa Catarina between 2003 and 2014, to implement several empirical tests. We found evidence of changes in investments, in taxes revenue, credit operations and the budget balance in election periods. The results suggest the personal characteristics of the mayor (gender, superior education, and the alignment with the governor), influence the fiscal policy in the municipalities of Santa Catarina. The data also suggest a fiscal consolidation after elections. Total expenditures and investments decrease, and the budget balance increase in the year after elections.