Government Support in Times of Crisis: Transfers and the Road to Socialism

Despite the adverse effects of economic crises, incumbents often retain significantelectoral support. We attribute this resilience to the intensified political returns of transfersduring crises. Our context is the largest infant nutrition program in the world, implemented bySalvador Allende and his left-wing coalition in Chile (1970-1973) as part of a large increase inspending that contributed to hyperinflation, scarcity of basic goods, and plummeting real wages.Using administrative data and surveys, we find that the delivery of three cups of milk per dayto all preschoolers in the country lowered infant mortality and helped the left-wing governmentto remain electorally popular. We support the causal interpretation of results by exploiting afamily planning program from the late 1960s, information campaigns targeting women, andvoting in gender-segregated booths. Furthermore, novel measures of the local severity of theeconomic crisis reveal that transfers yielded greater political returns in areas hardest hit byeconomic hardship. Why did the crisis fail to translate into support for the opposition coalition?Survey evidence suggests that transfers swayed voters who perceived the crisis as unrelated togovernment policies. Overall, our findings demonstrate how direct transfers and heterogeneousperceptions of economic crises can sustain the electoral popularity of governments.