Segregation and the fiscal bargain

• Department of Political and Social Sciences

This session of the Political Behaviour Colloquium features a presentation by Lucas Borba, a PhD candidate at Vanderbilt University

When a pothole opens on a street, how quickly the government responds may depend on the neighborhood's class composition. I argue that income-based residential segregation—the spatial organization of inequality, not merely its level—makes these disparities visible in daily life, eroding the quasi-voluntary compliance on which local fiscal capacity depends. I evaluate this argument in Brazil using 14 months of qualitative fieldwork, administrative data, and an original survey of over 1,100 formal and informal business owners in São Paulo. Instrumenting segregation with non-navigable waterways that fragmented urban development, and controlling for direct hydrological effects on fiscal outcomes, I find that segregated municipalities exhibit greater informality—driven by self-employment—and weaker fiscal capacity. At the individual level, residents of low-income neighborhoods report worse perceived service quality, larger class biases in government responsiveness, and lower tax morale. These findings recast informality as partly reflecting demand-side disengagement from a one-sided fiscal bargain.

The Zoom link will be sent upon the registration.