Electoral Accountability and Governors´ Election in Brazil, 1990-2006 George Avelino Filho FGV-EAESP [email protected] Leonardo Sangali Barone FGV-EAESP [email protected] Paper prepared for the 68th Annual Midwest Political Science Association Conference Panel: Territorial Politics: Regional Parties, Elections, and Governments. Chicago 2010 PRELIMINARY VERSION: PLEASE DO NOT CITE OR QUOTE WITHOUT PERMISSION. 1 Abstract The scholarship on the accountability of local incumbents usually focuses on two main hypotheses. The first, the sub-national vote, argues that voters rely mostly on information on incumbent’s local performance. The second hypothesis, the referendum vote, argues that is voters´ decision give more weight to national aspects, particularly their assessment of the president’s performance. In this last case, the electoral fate of local incumbents would be determined by aspects outside their reach. In this paper we test those two hypotheses for the Brazilian case using a data set on 131 governor’s elections for the 27 Brazilian states between 1990 and 2006. To our knowledge, this is the first time these two hypotheses are tested in a multiparty context, since previous studies focused mainly on two-party systems. Our results show no support for the referendum hypothesis, as national variables did not have any effect on the probability of governors´ reelection. Among the local variables, there is a negative effect from state fiscal deficits, a result that contradicts usual expectations on new democracies. 2 Introduction In the last three decades, new democracies in Latin America experienced a strong decentralization process and an increasing participation of the sub-national levels of government in the provision of public services. However, while decentralization has been a recurrent theme on the literature on sub-national governments, governor´s accountability to state voters and what defines voters´ decision in state elections has been less debated in a comparative way. According to the scholarship on the accountability of state governors, the electoral success of a sub-national incumbent has a local and a national component. Voters would assess sub- national officials based on information from both local and national economic performance (Rodden, 2004, Ebeid and Rodden 2006). In the economic voting literature, these components are respectively associated with sub-national voting – in this case, voters privilege information on local economic performance – and referendum voting – in this last case, voters privilege information on national economic performance and use sub-national elections to reward or punish incumbents that show partisan links with the president. In this paper, we investigate whether these two hypotheses hold for Brazilian sub-national governments. We use a data set on 131 governors elections for the 27 Brazilian states between 1990 and 2006 to test if Brazilian voters hold state governors accountable for local or national economic performance. Do Brazilian voters use information about the economy to evaluate governor’s performance? Does the national economic performance influence state elections through partisan links between state candidates and the president? Several theoretical and empirical reasons make Brazil an interesting case to study the accountability of state governors. On the theoretical side, following Remmer and Gélineau (2003) and Gelineau and Remmer (2006), we explore the applicability of economic voting models on sub-national governments outside the context in which it was initially developed. Economic voting models were first designed to explain national electoral results, especially in the United States (Kramer, 1971; Tufte, 1975; Fiorina, 1978; Kiewet, 3 1981; Abramovitz, Segal, 1996). Only more recently these models have extensively been applied to explain electoral outcomes in sub-national elections in federal systems (Peltzman, 1987; Chubb, 1988; Stein, 1990; Simon, Ostrom and Marra, 1991; Atkson and Partin, 1996; Lowry, Alt and Ferree, 1998; Ebeid and Rodden, 2001; 2006; Gélineau, 2002; Gélineau and Belanger, 2003; 2005; Remmer and Gélineau, 2003; 2005; Rodden and Wibbels, 2005; Leigh and McLeish, 2008), but still the United States remained the focus. The resilience of a theory depends mostly on its capacity to travel, that is, its capacity to explain empirical problems outside its place of birth. Secondly, these models were applied exclusively in two-party contexts, were candidates´ parties can be easily labeled as incumbents or challengers.1 Brazil is well known for its multi-party system and we make an effort to test economic voting models within this context. Between 1990 and 2006 politicians from 15 different parties were elected for state government. Moreover, even a preliminary observation over election results will show a high level of political competition at state level; that is, the institutional environment does not provide governors incumbents with significant electoral advantages over their challengers.2 Third, state level institutions are key to understanding Brazilian politics. State governments are responsible for more than one third of the public spending, and perform an essential role in the provision of public services such as education and health. In other words, Brazilian states provide an interesting test for the capacity of policy decentralization to fulfill expectations about increasing accountability at local levels On the empirical side, Brazil is one of the largest democracies in the world and the largest in Latin America. It has been a federation for more than a hundred years, since the birth of the Brazilian Republic in 1889. 1 This assertion is valid even for Argentina; as argued by Gelineau and Remmer (2005, p. 140), Argentinan electoral competition has been structured around two main parties: the Partido Justicialista (PJ) and UCR/Alianza (Unión Cívica Radial /Alianza). 2 State governors’ ability to manipulate fiscal policy instruments to influence voters is similar for all states. See Santos (2001) for several case studies. The general conclusion of this comparative book is that institutional constraints on budgeting are similar to all states, with a greater influence from the local executive in the budgeting process vis-à-vis the legislative. 4 Additionally, there is a great variation in socio-economic variables across Brazilian states. For instance, in 2003 the GDP per capita of the two richest states Sao Paulo and the Federal District was around US$ 5500, similar to a country like the Chile or the Czech Republic; in contrast, the GDP per capita for the two poorest states, Maranhão e Piauí, was about US$ 850, which would be similar to the Cameroon or the Guinea-Bissau.3 Last, but not least, since the democratization, in 1985, Brazilian governmental institutions have been made great efforts to produce good quality data on states´ public finance. Our results show no support for the referendum hypothesis. National variables did not show any significant effect on the probability of governors´ reelection. Among the local variables, there is a negative effect from state fiscal deficits, a result that contradicts usual expectations on new democracies. Data and Method We draw electoral data for our analysis from the Tribunal Superior Eleitoral (TSE), which publishes electoral results for all the Brazilian elections. Economic and financial data are drawn from the Secretaria do Tesouro Nacional (STN-MF), Instituto de Pesquisas Econômicas Aplicadas (IPEA), and from the Instituto Brasileiro de Geografia e Estatística (IBGE). Brazil holds direct and competitive elections for state governors since 1982, even before the end of the military dictatorship. However, we decided not to include the elections previous to 1990 for some reasons. First of all, in 1988 the Brazilian Congress promulgated a new Constitution and important aspects of the relation between central and local governments changed. 3 The country figures were extracted from the World Bank Developing Indicators (2005) 5 Further, before 1989 presidential elections the party system passed through an intense process of party differentiation. Under the military rule, only two parties, the governmental party ARENA (Aliança Renovadora Nacional) and the opposition party MDB (Movimento Democrático Brasileiro), were legally allowed to run for legislative elections. The imposed two-party system was extinguished only in 1979, and the party system was not completely established until the mid 90´s State and national elections for both executive and legislative branches in Brazil are held simultaneously in a four-year regular basis. The only exception is the 1990 elections, when the president had already been elected for a five-year term in 1989. Election rules are defined by a national Electoral Justice Court (Tribunal Superior Eleitoral - TSE) and do not vary among states. Reelection was not allowed for the executive branch until 1998. Except for the 2002 elections, national coalitions did not bind state level coalitions and political parties can freely negotiate regional alliances. Besides that, the main aspects of the electoral rules remained constant since 1990. Voting is compulsory in Brazil and we expect no endogenous effects of electoral mobilization. Considering all the 27 states and elections since 1990, the data comprises a total of 134 gubernatorial elections. Three states and the Federal District did not exist or did not hold state elections in 1986. Since there were no incumbents in