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The Political Economy of Social Spending by Local Government: A Study of the 3×1 Program in Mexico

Published online by Cambridge University Press:  05 September 2022

Alberto Simpser ,
Lauren Duquette-Rury ,
José Antonio Hernández Company  and
Juan Fernando Ibarra
Alberto Simpser
Affiliation:
ITAM-CIE
Lauren Duquette-Rury
Affiliation:
University of California, Los Angeles
José Antonio Hernández Company
Affiliation:
Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM)
Juan Fernando Ibarra
Affiliation:
Centro de Investigación y Docencia Económicas
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Abstract

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Social spending by central governments in Latin America has, in recent decades, become increasingly insulated from political manipulation. Focusing on the 3×1 Program in Mexico in 2002-2007, we show that social spending by local government is, in contrast, highly politicized. The 3×1 Program funds municipal public works, with each level of government—municipal, state, and central—matching collective remittances. Our analysis shows that 3×1 municipal spending is shaped by political criteria. First, municipalities time disbursements according to the electoral cycle. Second, when matching collective remittances, municipalities protect salaries of personnel, instead adjusting budget items that are less visible to the public, such as debt. Third, municipalities spend more on 3×1 projects when their partisanship matches that of the state government. Beyond the 3×1 Program, our findings highlight the considerable influence that increasing political and economic decentralization can have on local government incentives and spending choices, in Mexico and beyond.

Resumo

Resumo

En décadas recientes, la manipulación política del gasto social gubernamental a nivel nacional en Latinoamérica ha mostrado una tendencia a la baja. Con base en el estudio del Programa 3×1 para Migrantes en México, este artículo demuestra que el gasto social a nivel local, en cambio, ha experimentado niveles sustanciales de manipulación política. El Programa 3×1 financia bienes públicos municipales, requiriendo que cada uno de los tres niveles de gobierno —municipal, estatal, y nacional— aproximadamente iguale el monto de remesas colectivas. Nuestro análisis muestra que el gasto de aquellos municipios que participan en el Programa 3×1 está influenciado por criterios políticos. Primero, el gasto municipal en 3×1 varía según el ciclo electoral. Segundo, al contribuir al Programa 3×1, los municipios protegen el gasto en salarios, y en cambio ajustan elementos presupuestales menos visibles al público, tales como el servicio de deuda. Tercero, los municipios gastan más en proyectos del 3×1 cuando su afiliación partidista es la misma que la del gobierno estatal. Más allá del contexto del Programa 3×1, nuestros hallazgos subrayan el efecto de la creciente descentralización política y económica sobre los incentivos y las decisiones de gasto de gobiernos locales, tanto en México como en otros países.

Type
Research Article
Information
Latin American Research Review , Volume 51 , Issue 1 , 2016 , pp. 62 - 83
Copyright
Copyright © 2016 by the Latin American Studies Association

Footnotes

Authors are listed alphabetically after Simpser. We thank Javier Aparicio, Xóchitl Bada, Katrina Burgess, Merilee Grindle, Covadonga Meseguer, Frederic Schaffer, Dan Slater, seminar participants at the Latin American Studies Association annual meeting, and anonymous referees for helpful suggestions.

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