Fiscal conservatism in a new democracy: 'sophisticated' versus 'naive' voters
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2009-02
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We use data from gubernatorial elections in Brazil to test the electoral reactions of 'sophisticated' and ''naive' voters to fiscal surpluses. Our results complement Brender and Drazen [Brender, Adi, and Drazen, A., (2005b), 'How do budget deficits and economic growth affect reelection prospects? Evidence from a large cross-section of countries', NBER Working Paper 11862, National Bureau of Economic Research, Cambridge, Massachusetts]: we find no evidence of fiscal illusion while, in some cases, a fiscal surplus may actually increase the probability of reelection. (c) 2008 Elsevier B.V. All rights reserved.
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