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Analyzing the Performance of Local Government in Mexico: A Political Explanation of Municipal Budgetary Choices

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  • Moreno, Carlos

Abstract

This paper analyzes the budgetary choices of municipal governments in Mexico. Using a panel data approach that includes most municipalities in the country throughout the 1990-2001 period, I investigate to what extent local democracy has stimulated municipal governments to increase their investments on basic infrastructure projects, rather than expanding their bureaucratic apparatuses. My findings suggest that only under a decentralized policy setting, the competitiveness of the electoral arena has a positive influence on the provision of local public goods. I also find evidence that basic infrastructure spending increases when local elections are held, and when the local mayor belongs to a different party than the state governor.

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  • Moreno, Carlos, 2005. "Analyzing the Performance of Local Government in Mexico: A Political Explanation of Municipal Budgetary Choices," University of California at San Diego, Center for U.S.-Mexican Studies qt3v39q4j0, Center for U.S.-Mexican Studies, UC San Diego.
  • Handle: RePEc:cdl:usmexi:qt3v39q4j0
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    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    2. Alesina, Alberto & Hausmann, Ricardo & Hommes, Rudolf & Stein, Ernesto, 1999. "Budget institutions and fiscal performance in Latin America," Journal of Development Economics, Elsevier, vol. 59(2), pages 253-273, August.
    3. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
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