The distribution game: Evidence from 200,000 campaign donors

Abstract

This paper examines how reduced individual influence leads politicians to use public-sector employment as a compensatory instrument. Identification exploits a Brazilian reform imposing population-based ceilings on municipal council size, generating quasi-experimental variation in political leverage. I combine electoral records for city councilors, campaign donation data on roughly 200,000 individuals, and matched administrative labor-market records. Reduced influence raises the likelihood that campaign supporters obtain public-sector jobs by about 26%. These gains concentrate in managerial and supervisory positions, include upward reallocation of already employed insiders, and are associated with lower education and greater skill and pay mismatch. The results show that public employment operates as a personnel-based distributive instrument, through which politicians offset diminished influence, with consequences for bureaucratic quality and governance. • Reduced legislative influence increases public-sector hiring of political supporters. • Politicians substitute fiscal tools with public jobs when budget expansion is constrained. • Employment gains concentrate in discretionary, high-leverage administrative positions. • Ideologically aligned supporters benefit more from public-sector appointments. • Effects persist beyond elections and alter bureaucratic composition.