Abstract The 1988 federal Constitution introduced a complex and innovative institutional arrangement that not only reestablished political rights and democratic procedures, but also reinforced decentralization as a fundamental guideline for policy implementation in Brazil. As a result, municipalities have become pivotal actors in the policymaking process. Scholars of Latin American politics have given much emphasis to the causes and determinants of decentralization, but not much has been done toward a more general understanding of how this increased decentralization has affected policymaker behavior and policy outcomes. This paper aims to do exactly that. Specifically, it investigates how institutional arrangements and electoral competition affect local government performance. The theoretical basis is the electoral democratic theory that broadly highlights elections as instruments of citizen control in retrospective and prospective voting approaches. The research employs a large-N cross sub-national analysis based on a dataset of electoral, partisan, socioeconomic and public financial information collected from over 5500 municipalities. Local governments’ performance, our dependent variables, are synthetic indicators formulated from 2009 nationwide surveys on public education, health, housing and welfare services. The OLS regression results confirm the hypothesis that politics variables do matter in how politicians make decisions and implement policy under the new Brazilian democratic Era. The empirical evidences suggest that electoral competition does not present a direct effect on government performance, however, ideology and citizen participation do. Therefore, this paper helps to expand our understanding of a political system’s impact on public policy outputs, which is extremely important not only for academic purpose but also to support policymakers’ decisions.
THE IMPACTS OF BUDGET DECENTRALIZATION ON ECONOMIC GROWTH AND LOCAL GOVERNMENT PERFORMANCE
