We use data from gubernatorial elections in Brazil to test the electoral reactions of "sophisticated" and "naïve" voters to fiscal surpluses. Our results complement Brender and Drazen [Brender, Adi, and Drazen, A., (2005b), "How do budget deficits and economic growth affect reelection...

The empirical literature on the effects of competition on the supply of public goods shows controversial results at the local level. The main objective of this paper is to investigate this relationship in a federalist country (Brazil) where the political system places few barriers to the entry...