A Comparative Analysis of Political Competition and Local Provision of Public Goods: Brazil, Colombia and Mexico(1991-2010)

Rojas Rivera, Angela Milena and Molina Guerra, Carlos A. (2015): A Comparative Analysis of Political Competition and Local Provision of Public Goods: Brazil, Colombia and Mexico(1991-2010). Published in: Borradores Departamento de Economia No. 56 (19 October 2015): pp. 1-78.

Abstract

Abstract: We explore the effect of political competition on the local provision of public goods in three countries: Brazil, Colombia and Mexico from 1991 to 2010 using municipal data. These countries share characteristics that make a comparative analysis useful in understanding the role of governance structures, which include the degree of fiscal and political decentralization. Based on a multidimensional approach of political competition and bringing to the fore the role of congressional elections, we establish the effect of several measures of political competition based on lower chamber elections on indicators of primary education, sanitation and infant mortality. We find that Brazil displays the highest elasticity with expected signs in several public goods to most measures of political competition, while Mexico shows strong connection of political competition indicators to all public goods but negative effects of voter turnout and electoral volatility; Colombia is the least responsive except for infant mortality. These differences are attributed to influences stemming from local accountability and party discipline.

Resumen: En esta investigación exploramos el efecto de la competencia política sobre la provisión local de bienes públicos en tres países: Brasil, Colombia y México para el período 1991-2010 usando datos municipales. Estos tres países comparten características que hacen el análisis comparativo especialmente útil en la comprensión del papel jugado por las estructuras de gobierno, las cuales incluyen el grado de descentralización económica y política. Basado en un enfoque multidimensional de la competencia política y destacando el papel de las elecciones de congreso, establecemos el efecto que ejercen diversas medidas de competencia política, basadas en las elecciones de cámara de representantes, sobre indicadores de educación primaria, sanidad y mortalidad infantil. Encontramos que Brasil exhibe la elasticidad más alta y con signos esperados en la provisión de los bienes públicos ante la mayoría de medidas de competencia política, mientras que Méjico muestra una fuerte conexión entre estas medidas y todos los bienes públicos aunque con efectos negativos de la tasa de participación y volatilidad electoral. Colombia es el país que más baja respuesta presenta, excepto por mortalidad infantil. Atribuimos estas diferencias a las influencias provenientes de la rendición de cuentas y la disciplina de los partidos.

• Item Type: MPRA Paper
• English Title: Análisis comparativo de la competencia política y Provisión local de bienes públicos: Brasil, Colombia y México(1991-2010)
• Language: English
• Keywords: Political Competition, Political Responsiveness, Government Effectiveness, Government quality, Democratic Governance, Local Governance, Local Public Goods, Comparative Analysis, Brazil, Colombia, Mexico
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H75 - State and Local Government: Health ; Education ; Welfare ; Public Pensions

References

Acemoglu, D. (2003). Why not a political Coase theorem? Social conflict, commitment, and politics. Journal of Comparative Economics, 31(4), 620–652. doi:10.1016/j.jce.2003.09.003

Acemoglu, D., & Robinson, J. A. (2006). Economic Backwardness in Political Perspective. American Political Science Review, 100(01), 115–131. doi:10.1017/S0003055406062046

Afonso, R. R. (2007). Descentralização fiscal, políticas sociais, transferência de renda no Brasil. Santiago de Chile. Retrieved from http://www.cepal.org/ilpes/publicaciones/xml/7/28327/sgp63.pdf

Aidt, T. S., & Eterovic, D. S. (2011). Political competition, electoral participation and public finance in 20th century Latin America. European Journal of Political Economy, 27(1), 181–200. doi:10.1016/j.ejpoleco.2010.06.006

Alesina, A., Carrasquilla, A., & Echavarría, J. J. (2002). Descentralización en Colombia. In A. Alesina (Ed.), Reformas Institucionales en Colombia (pp. 95–133). Bogotá, D.C: Editorial Nomos.

Alesina, A., Hausmann, R., Hommes, R., & Stein, E. (1999). Budget institutions and fiscal performance in Latin America. Journal of Development Economics, 59(2), 253–273. doi:10.1016/S0304-3878(99)00012-7

Ames, B. (2000). The Deadlock of Democracy in Brazil. The University of Michigan Press.

Ames, B. (2002). Party discipline in the Chamber of Deputies. In S. Morgenstern & B. Nacif (Eds.), Legislative Politics in Latin America (pp. 185–215). Cambridge University Press.

Arvate, P. R. (2013). Electoral Competition and Local Government Responsiveness in Brazil. World Development, 43, 67–83. doi:10.1016/j.worlddev.2012.11.004

Banks, A. S., Muller, T. C., Overstreet, W. R., & Isacof, J. F. (2009). Political Handbook of the World 2009. (J. F. Banks, Arthur S.; Muller, Thomas C.; Overstreet, William R.; Isacof, Ed.). Washington D.C.: CQ Press.

Bartolini, S. (1999). Collusion, Competition and Democracy: Part I. Journal of Theoretical Politics, 11(4), 435–470. doi:10.1177/0951692899011004001

Bartolini, S. (2000). Collusion, Competition and Democracy: Part II. Journal of Theoretical Politics, 12(1), 33–65. doi:10.1177/0951692800012001002

Becker, G. (1983). A Theory of Competition Among Pressure Groups for Political Influence. The Quarterly Journal of Economics, 98(3), 371–400.

Besley, T., & Coate, S. (1998). Sources of Inefficiency in a Representative Democracy : A Dynamic Analysis. The American Economic Review, 88(1), 139–156.

Besley, T., Persson, T., & Sturm, D. (2010). Political competition, policy and growth: Theory and evidence from the US. CEP Discussion Papers, (1009). Retrieved from http://restud.oxfordjournals.org/content/77/4/1329.short

Boulding, C., & Brown, D. S. (2013). Political Competition and Local Social Spending: Evidence from Brazil. Studies in Comparative International Development. doi:10.1007/s12116-013-9145-8

Buchanan, J. M., & Tullock, G. (1962). The Calculus of Consent: Logical Foundations of Constitutional Democracy. Indianapolis: Liberty Fund.

Bühlmann, M., & Zumbach, D. (2011). On the Multidimensionality of Political Competition. Zurich Open Repository and Archive. Retrieved from http://dx.doi.org/10.5167/uzh-53657

Cárdenas, M., & Perry, G. (2011). Fiscal Policy in Latin America. In The Oxford Handbook of Latin American Economics (pp. 266–292).

CEDLAS. (2014). SEDLAC Socioeconomic Database for Latin America and the Caribbean. Retrieved December 1, 2014, from http://sedlac.econo.unlp.edu.ar/eng/statistics.php

CEFP. (2005). El Ingreso Tributario en México. México, D.F.

Cleary, M. R. (2007). Electoral Competition , Participation, and Government Responsiveness in Mexico. American Journal of Political Science, 51(2), 283–299.

Collier, P. (2008). The Bottom Billion. Oxford University Press.

Collier, R., & Collier, D. (2002). Shaping the Political Arena. Critical Junctures, the Labor Movement and Regime Dynamics in Latin America. Notre Dame, Indiana: University of Notre Dame.

Dahl, R. A. (1989). Poliarquía: Participación y oposición. España: Tecnos.

DANE. (2010). Departamento Administrativo Nacional de Estadística. Retrieved December 1, 2014, from http://www.dane.gov.co/

Daughters, R., & Harper, L. (2007). Fiscal and Political Decentralization Reforms. In The State of Reform in America Latina (pp. 213–262).

Díaz, Y. (2003). ¿Es necesario sacrificar equidad para alcanzar desarrollo?: El caso de las inequidades en la mortalidad infantil en Colombia (Vol. 11). Retrieved from https://economia.uniandes.edu.co/components/com_booklibrary/ebooks/D2003-11.pdf

Dixit, A. (1996). The Making of Economic Policy: A Transaction-Cost Politics Perspective. (T. M. Press, Ed.). Cambridge, MA.

Downs, A. (1957). An Economic Theory of Democracy. New York: Harper.

ECLAC. (2014). CEPALSTAT Databases and Statistical Publications. Retrieved December 1, 2014, from http://estadisticas.cepal.org/cepalstat/WEB_CEPALSTAT/Portada.asp?idioma=i

Eslava, M. (2005). Political budget cycles or voters as fiscal conservatives? Evidence from Colombia. Documento CEDE, (12).

Gobierno Nacional. (2002). Ley 715 de Diciembre 21 de 2001 (Vol. 357).

Gobierno Nacional. Ley 1176 de 2007 (2007). Colombia: http://www.alcaldiabogota.gov.co/sisjur/normas/Norma1.jsp?i=28306. Retrieved from http://www.mineducacion.gov.co/1621/articles-146175_archivo_pdf.unknown

Greene, W. (2012). Econometric Analysis (7th ed.). Prentice Hall.

IBGE. (2010). Instituto Brasileiro de Geografia e Estatística. Retrieved December 1, 2014, from http://www.ibge.gov.br/home/

INEGI. (2011). Instituto Nacional de Estadística y Geografía. Retrieved December 1, 2014, from http://www.inegi.org.mx/

Jones, M. P. (2010). Beyond the Electoral Connection: The Effect of Political Parties on the Policymaking Process. In How Democracy Works. Political Institutions, Actors, and Arenas in Latin American Policymaking (pp. 19–46).

Kaufmann, D., Kraay, A., & Massimo, M. (2012). The worldwide governance indicators (WGI) project. Retrieved May 1, 2014, from http://info.worldbank.org/governance/wgi/index.aspx#home

Keefer, P. (2012). Database of Political Institutions : Changes and Variable Definitions. The World Bank. Retrieved from http://siteresources.worldbank.org/INTRES/Resources/469232-1107449512766/DPI2012_Codebook2.pdf

Lehoucq, F., Negretto, G., Aparicio, F., Nacif, B., & Benton, A. (2005). Political Institutions, Policymaking Processes , and Policy Outcomes in Mexico Fabrice Lehoucq. Research Network Working Paper (Vol. R-512).

Lizzeri, A., & Persico, N. (2005). A Drawback of Electoral Competition. Journal of the European Economic Association, 3(6), 1318–1348.

López González, M. (2004). Finanzas Municipales en México : En la Búsqueda de un Eficiente Comportamiento de los Egresos. Mexico, D.F. Retrieved from http://www.premiomunicipal.org.mx/p2009/docs/Finanzas p%FAblicas municipales ML.pdf

Mainwaring, S., & Zoco, E. (2007). Political sequences and the stabilization of interparty competition: Electoral volatility in old and new democracies. Party Politics, 13(2), 155–178.

Monaldi, F. (2010). Decentralizing Power in Latin America: The Role of Governors in National Policymaking. In How Democracy Works. Political Institutions, Actors, and Arenas in Latin American Policymaking.

Moreno-Jaimes, C. (2007). Do Competitive Elections Produce Better-Quality Governments?: Evidence From Mexican Municipalities, 1990-2000. Latin America Research Review, 42(2), 136–153.

Nacif, B. (2002). Understanding Party Discipline in the Mexican Chamber of Deputies: The Centralized Party Model. In S. Morgensten & B. Nacif (Eds.), Legislative Politics in Latin America (pp. 254–284). Cambridge University Press.

Norris, P. (2004). Electoral Engineering: Voting Rules and Political Behavior. Cambridge University Press.

North, D. C. (1990). A Transaction Cost Theory of Politics. Journal of Theoretical Politics, 2(4), 355–367. doi:10.1177/0951692890002004001

Osterkatz, S. (2012). Brazil. In H. Kitschelt & Y. Wang (Eds.), Research and Dialogue on Programmatic Parties and Party Systems Case Study Reports (pp. 4–34). Stockholm: International, IDEA. Retrieved from http://www.idea.int/resources/analysis/loader.cfm?csModule=security/getfile&pageid=

Ostrom, E. (2005). Understanding Institutional Diversity (Princeton). Princeton University Press.

Peña, J. A., & Bojórquez, A. L. (2012). Autonomía Financiera Municipal. México, D.F.

Persson, T., & Tabellini, G. E. (2003). The economic effects of constitutions. Cambridge, MA: MIT Press.

Polity IV Project. (2010). Colombia Polity IV Country Report 2010. Polity IV Country Report 2010. Retrieved from http://www.systemicpeace.org/polity/Colombia2010.pdf

Polity IV Project. (2014). The Polity Project. Retrieved January 1, 2015, from http://www.systemicpeace.org/polityproject.html

Sanchez, F., & Pachón, M. (2013). Descentralización, Esfuerzo Fiscal y Progreso Social en Colombia en el Nivel Local, 1994-2009: ¿Porqué Importa la Política Nacional? Serie Documentos Cede, 2013-38. Retrieved from http://economia.uniandes.edu.co

Sánchez, F., & Pachón, M. (2013). Decentralization , Fiscal Effort and Social Progress in Colombia at the Municipal Level , 1994-2009: Why Does National Politics Matter? (No. 396). Retrieved from http://publications.iadb.org/bitstream/handle/11319/4553/Sanchez Pachon 080813.pdf;jsessionid=67BC635799AAA32B99F72C3761B89455?sequence=4

Snyder, R., & Samuels, D. (2004). Legislative Malapportionment in Latin America. In Federalism and Democracy in Latin America (pp. 131–172). Baltimore, MD: Johns Hopkins University Press.

Souza, C. (2002). Brazil’s System of Local Government, Local Finance and Intergovernmental Relations, 1–30. Retrieved from http://info.worldbank.org/etools/docs/library/229986/Souza Brasil%27s system of local government.pdf

Stein, E. (1999). Fsical Decentralization and Government Size in Latin America. Journal of Applied Economics, 2(2), 357–91. Stigler, G. J. (1972). Economic Competition and Political Competition. Public Choice, 13(Sep), 91–106.

UNDP. (2014). Human Development Index. Retrieved December 1, 2014, from http://hdr.undp.org/en/data

Weingast, B. R., Marshall, W. J., & Marshall, J. (1988). The Industrial organization of Congress; or, Why Legislatures , Like Firms , Are Not Organized as Markets. Journal of Political Economy, 96(1), 132–163.

Wittman, D. (1989). Why Democracies Produce Efficient Results. Journal of Political Economy, 97(6), 1395–1424.

Wooldridge, J. (2002). Econometric Analysis of Cross Section and Panel Data. Cambridge: MIT Press.

World Bank. (2014). World Bank Development Indicators. Retrieved December 1, 2014, from http://data.worldbank.org/indicator