MercoPress. South Atlantic News Agency

Uruguay: “Government Transfers and Political Support”

A working paper from the US National Bureau of Economic Research, estimates the impact of a large anti-poverty program -- the Uruguayan PANES -- on political support for the government that implemented it.

The program mainly consisted of a monthly cash transfer for a period of roughly two and half years. Using the discontinuity in program assignment based on a pre-treatment score, we find that beneficiary households are 21 to 28 percentage points more likely to favour the current government (relative to the previous government).

Impacts on political support are larger among poorer households and for those near the centre of the political spectrum, consistent with the probabilistic voting model in political economy. Effects persist after the cash transfer program ends.

The authors estimate that the annual cost of increasing government political support by 1 percentage point is roughly 0.9% of annual government social expenditures.

The paper was done by Marco Manacorda, Edward Miguel, and Andrea Vigorito.

NBER Working Paper No. 14702 February 2009 JEL No. D72,H53,O12,O23

Marco Manacorda, Department of Economics, Queen Mary University of London CEP - London School of Economics.

Edward Miguel, Department of Economics, University of California, Berkeley

Andrea Vigorito, Instituto de Economia, Facultad de Ciencias Economicas

Universidad de la Republica, Montevideo, Uruguay.

See Full Paper in PDF format