This paper analyzes how electoral incentives affected the performance of a major decentralized conditional cash transfer program intended on reducing school dropout rates among children of poor households in Brazil. We show that while this federal program successfully reduced school dropout by 8 percentage points, the program's impact was 36% larger in municipalities governed by mayors who faced reelection possibilities compared to those with lame-duck mayors. First-term mayors with good program performance were much more likely to be reelected. These mayors adopted program implementation practices that were not only more transparent but also associated with better program outcomes.

This paper identifies neighborhood peer effects on children's school enrollment decisions using experimental evidence from the Mexican PROGRESA program. We use exogenous variation in the school participation of program-eligible children to identify peer effects on the schooling decisions of ineligible children residing in treatment communities. We find that peers have considerable influence on the enrollment decisions of program-ineligible children, and these effects are concentrated among children from poorer households. These findings imply that policies aimed at encouraging enrollment can produce large social multiplier effects.