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The Impact of Political Fragmentation on the Municipal Spending in Peru

Author

Listed:
  • Alberto Mendoza
  • Sergio Hinostroza

Abstract

This study evaluates the impact of political fragmentation at the municipal level on public expenditure during the period 2007–2018 for the Peruvian case. The results indicate that the effect of political fragmentation within a municipal council on the spending of the provincial municipality could be non-linear. That is, political fragmentation affects negatively the expenditure in a certain tranche and positively in another. In particular, we observe that the incidence occurs only on the execution of capital expenditure. On the other hand, the political fragmentation of the districts within a province seems not to have a significant effect on the execution of expenditure in coordinated areas such as transport, health, and sanitation. (JEL Codes: E62, H54, H72, P16, P35)

Suggested Citation

  • Alberto Mendoza & Sergio Hinostroza, 2023. "The Impact of Political Fragmentation on the Municipal Spending in Peru," CESifo Economic Studies, CESifo Group, vol. 69(3), pages 125-157.
    • Handle: RePEc:oup:cesifo:v:69:y:2023:i:3:p:125-157.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifad008
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    More about this item

    Keywords

    political fragmentation; public spending; management of resources; municipalities;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P35 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance

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