UC Berkeley

This dissertation studies the impacts of quid pro quo relationships between politiciansand their supporters on public policy and the labor market of public servants. Chapter 2 investigates the effects of a temporary shock in the likelihood of detecting officeholders’ misbehavior on the composition of public expenditures and reelection rates of incumbent politicians, taking into consideration the existence of an ongoing relationship between lawmakers and campaign contributors. This shock derives from an experiment developed by Zamboni and Litschig (2018) that temporarily and randomly increased the likelihood of selection of Brazilian municipalities into a preexisting audit program against corruption. I document a reduction in the probability that treated municipalities engaged in construction projects during the experiment, with a partial reversal in the reelection year, as the audit risk returned to its baseline mark. I report that the threat of audit mostly impacted the actions of politicians in locations with previous experience in the anti-coruption program and where mayors had close relationships with historically corrupt campaign donors, such as construction companies. Moreover, I estimate a large contraction in the likelihood of contribution from these donors to the reelection campaigns of treated mayors and a sizeable reduction in their reelection rates. Chapter 3, co-authored with Thiago Scot, analyzes the effects of a change in power at the local level on the employment of health care workers in Brazil. It compares municipalities where the incumbent party barely won a bid for reelection with those where the incumbent party barely lost, in order to estimate the effects of political turnover on the labor market for public servants. It reports a larger rate of termination of employment contracts in municipalities affected by these shocks, in comparison to the control group. It shows that employees are more likely to leave the health care labor force permanently after political turnover and that public employees on unstable career tracks drive most of the disruption in the employment contracts.