Desktop version

Home arrow Management arrow Improving Access and Quality of Public Services in Latin America: To Govern and To Serve

Results

The Link Between Political Competition and Local Tax Capacity

The results of the hazard model are presented in Table 3.1. Column 1 shows that the cadastral update is time-dependent. That is, the older the last update the greater the likelihood of having one in the current year. In column 2, some political variables to measure political competition are introduced in the model: the effective number of parties in the municipality, and two dummies identifying mayors from the traditional political parties—Liberal and Conservative. The effective number of parties measures the local political competition,14 and the dummies for the traditional parties are to determine if mayors who have a national network have less incentive to update. To measure the degree of political competition at the local level for national office we include two variables: GINI15 for party share in the House votes (column 2), and the effective number of candidates in the municipality competing for the House of Representatives (column 3). Both these variables indicate the degree of political competition at the local level, for a seat in the Chamber of Representatives (House). The variables capture the political control that a politician exerts in a particular municipality. For instance, if the entire share of the votes for the House in a given municipality is obtained by a particular politician it means that such a politician controls that municipality. In that case the mayor would try to maintain his or her political stronghold by bringing in additional public goods financed through central government resources. Hence, the local politicians—mayors and council representatives—would not be so hard pressed to raise local taxes.

Although all the variables have the expected direction, only the GINI is significant and is negatively related to the decision to update. This means the fewer the parties in the municipality competing for departmental votes, the fewer the incentives to update the cadastre (our measure of fiscal effort). Equally, seen from the perspective of the effective number of candidates weighted by their support within the municipality, the expectation that greater competition is positively related to the decision to update is confirmed.16 This result confirms that the regional political context within which the municipality’s politics happens is fundamental to understanding the decision to update the local cadaster. The results, however, should be viewed with caution as we are assuming that the greater concentration

The table has a weird format for the presentation of the results.

Variables

Cadastral updating LOGIT (marginal coefficients)

Years to last update

Urban

0.1500***

0.0092***

0.0093***

0.166***

(0.0119)

(0.0008)

(0.0008)

(0.0136)

Rural

0.0775***

0.0057***

0.0058***

0.109***

(0.0099)

(0.0006)

(0.0006)

(0.0115)

Political

Representative

0.0006

0.00065

0.0115

number of parties

(0.0018)

(0.0018)

(0.0327)

Mayor from

-0.0022

-0.00204

-0.0588

Liberal party

(0.0062)

(0.0063)

(0.116)

Mayor from

-0.0017

-0.00137

-0.0321

Conservative party

(0.0067)

(0.0068)

(0.124)

Gini of party share

-0.6134***

-0.64577***

(0.1714)

(0.1735)

Effective number

0.386***

of House

(0.110)

candidates

Decentralization

Per-capita transfers

-0.0251***

-0.02374***

-0.426***

(ln)

(0.0065)

(0.0066)

(0.119)

Royalties

-0.00022

-0.0002

-0.00191

(0.0006)

(0.0006)

(0.0106)

Students-

-0.0302

-0.354 (0.940)

population ratio

(0.0523)

Public test score

0.0922 (0.0803)

1.6 (1.450)

Departmental

Yes

Yes

Yes

Yes

fixed effects

Year effects

Yes

Yes

Yes

Yes

Observations

7826

7826

6497

6497

Source: See appendix

*,**,***: Coefficients significant at the 10 %, 5 %, and 1 % levels, respectively. Standard errors in brackets

Per-Capita GDL (ln), Poverty Rate, Gini of Land Value, and Urban Population were included as controls of regional votes would soften the local budget constraint. We do not have an exact measure of the resources that the regional politicians in the National Congress may have delivered to the local governments.

In column 3, we control for socio-economic variables the results of which are not shown due to space constraints. Besides, the per capita transfers from the central government are strongly and negatively related to cadastral updates, indicating that local fiscal effort may be curtailed if the municipality is financed through other sources. Finally, the last column indicates that education enrollment rates and quality of education are not related to cadastral update, implying that no fiscal effort is forthcoming from local governments because they are trailing in these indicators.

 
Source
< Prev   CONTENTS   Source   Next >

Related topics