In this paper we investigate the existence of a relationship between presidential elections in Brazil and the conduct of fiscal policy by the federal government, along the period from 1985 to 2010. We also look at the possible effects of major institutional changes that took place in Brazil over the period, namely the Fiscal Responsibility act and the presidential reelection amendment to the constitution. Overall, we conclude that at the federal level the conduct of fiscal policy behaves cyclically, following the political calendar. The results for the reelection amendment are inconclusive regarding its true importance for the conduct of fiscal policy at the federal level. However, we found an important role for the fiscal responsibility act in reducing annual fluctuations in some revenues and expenditures of the federal budget.
Political cycle; Fiscal policy; Budget; Elections; Fiscal responsibility; Reelection
