The Impact of Political Fragmentation on the Municipal Spending in Peru

Mendoza A.; Hinostroza S. · CESifo Economic Studies (2023) · DOI: 10.1093/cesifo/ifad008

Resumen

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) © The Author(s) 2023. Published by Oxford University Press on behalf of Ifo Institute, Munich. All rights reserved.

Instituciones: Universidad del Pacífico