Development via Administrative Redistricting: Evidence from Brazil; Dr Ricardo DAHIS (Pontifical Catholic University of Rio de Janeiro)

Abstract

We exploit a large redistricting episode in Brazil to examine if, and how, administrative unit splits impact local development. Using a rich panel of administrative and spatial data, we first document that requests to split are more likely to be initiated by poor and rural districts. Employing a difference-in-differences strategy with areas whose requests to split were never approved serving as a control group, we find that splitting leads to an expansion of the public sector, some improvements in public service delivery and children's education attainment, but no impacts on the private sector. Meanwhile, outcomes are unaffected in parent municipalities. Results are consistent with adaptations of policy to local preferences. Our results inform the equity-efficiency trade-off embedded in decentralization reforms worldwide.

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