Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/115536
Authors: 
Estache, Antonio
Garsous, Grégoire
da Motta, Ronaldo Serôa
Year of Publication: 
2015
Series/Report no.: 
IDB Working Paper Series IDB-WP-593
Abstract: 
This paper investigates the effects of political (mis)alignment on public service delivery when mandates are shared between state and local governments. We analyze sewage treatment policies in the state of São Paulo, Brazil. Relying on difference-in-differences estimations, we establish a causal relationship between political alignment and higher sewage treatment provision. Conceptually, we find that, with uncertain local commitment and weakly enforceable local obligations, shared mandates lead to a moral hazard issue implying service under-provision. Our results show that political alignment attenuates such moral hazard effects.
Subjects: 
political alignment
infrastructure provision
water and sanitary services
moral hazard
Brazil
JEL: 
H40
H54
H72
P48
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-nd/3.0/igo/legalcode
Document Type: 
Working Paper

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