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

  • Author(s): Moreno, Carlos
  • et al.
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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