Women and risk-taking behaviour in local public finance

ABSTRACT

This study examines how female representation in local elected (mayor and legislature) and administrative (mid-level manager) positions influences municipal financial decision-making in 764 Japanese city-level governments. Findings show that female representation in local councils is positively correlated with risk-averse behaviour in financial decisions, as female representation on the legislature is negatively associated with issuing municipal bonds and with local investment in public corporations. Female representation in executive (mayor and vice-mayor) and mid-level administrative managerial positions has no apparent effects on local financial decisions. This study tests existing explanations of relationships between female managerial representation and fiscal behaviour in an Asian developed setting characterized by considerable underrepresentation of women in politics.

KEYWORDS:

• Local government
• financial decision-making
• gender representation
• Japan

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The Handbook of Data on Japanese Women in Political Life is issued every four years and contains data regarding female representation in the local council only in the year of publication (2007, 2011). In other words, in our data set (2007–2012), the handbook does not provide data in 2008–2010 or 2012. In filling this gap, we use data from 2007 and 2011 for these years, depending on the starting year of each local councillor’s term. Local council term data are collected from the List of Local Chief Executives (2007–2012 editions) (Chihō Jichi Sōgō Kenkyūjo, 2007-2012). Regarding two socio-economic control variables (unemployment rate and agricultural sector economy), we use the value in 2005 for the years of 2007, 2008, and 2009 and the value in 2010 for the years of 2010, 2011, and 2012, because these variables are available only in the years of 2005 and 2010.

2. Additionally, we rerun the same models with the ‘disaster’ dummy variable to include the effects of the 2011 earthquake in our analysis. However, except for one variable – conservative ideology – in general results and statistical significances do not change drastically.

Additional information

Funding

The research for this paper was financially supported by the research project, “Out of Control or over Controlled? Incentives, Audits and New Public Management”, and we gratefully acknowledge the financial support from Riksbankens Jubileumsfond (the Swedish Foundation for Humanities and Social Sciences).

Notes on contributors

Kohei Suzuki

Kohei Suzuki earned a PhD in Public Policy at the School of Public and Environmental Affairs in Indiana University. He is a postdoctoral research fellow at the Quality of Government Institute in the University of Gothenburg. His research focuses on bureaucratic structure, administrative reforms, and comparative public administration and management.

Claudia N. Avellaneda is an associate professor at the School of Public and Environmental Affairs in Indiana University. She specializes in public management and governance in developing countries with special emphasis on Latin American local governments.