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Dividing the Dirty Dollar: The Allocation and Impact of Illicit Campaign Funds in a Gubernatorial Contest in Brazil

Descriptions of elections in Brazil have long emphasized that much of the money used in campaigns is unreported to electoral authorities. As unreported expenditures are not typically observable by scholars, academic understanding of the uses and electoral impact of political finance in Brazil is based solely upon analyses of reported expenditures, and thus remains incomplete. Drawing upon a unique dataset which documents the allocation of illicit campaign funds during a gubernatorial reelection campaign in the state of Minas Gerais in 1998, we provide the first explicit analysis of the targeting and impact of off-the-books campaign funds. As the scheme revolved around buying off scores of low-level politicians, our first step is to build a profile of the typical 'bought' politician. Secondly, we draw upon advances in the literature on program evaluation to estimate the effect that the purchase of low-level politicians had on electoral returns in the contest.