Arieda Muco (CEU)
Campaign Financing Ban and (Un)Intended Consequences
To limit the power of corporations in politics, in 2015, the Brazilian Supreme Court banned corporate donations to politicians campaigns. Using a novel dataset of political connections, we document that after the ban firms continue to contribute to politicians’ campaigns, via their managers, exploiting loopholes in the law. Moreover, manager contributions after the ban are comparable to firm contributions before the ban. Finally, managers themselves are more likely to enter the political race. These findings imply several unanticipated consequences that should be taken into consideration for policy evaluation.