Does gender matter in budget deviations? An empirical assessment of Spanish local governments

ABSTRACT

By using a sample of 140 Spanish municipalities for the period 2008-2018, our results show that the gender of the mayor and the percentage of women councillors in local governments influence budget deviations both in expenditures and revenues. Concretely, municipalities with women mayors and more female members tend to overestimate revenues and underestimate expenditures; but these effects turn contrary when the number of female councillors increases, resulting in a better financial situation. Then, we may conclude that women could contribute to the financial health of local governments once they have enough representation.

KEYWORDS:

• Budget deviations
• gender gap
• women politicians
• female participation
• local governments

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Article 26 of the LGs Regulatory Law (Ley Reguladora de Bases de Régimen Local) sets out a list of minimum services to be provided by local authorities: public lighting, cemetery, waste collection, street cleaning, drinking water supply, sewer system and drains, paving and accesses to the municipality. Municipalities with more than 5,000 inhabitants must provide all these services and, additionally, park and green areas, library, and waste treatment. Municipalities with more than 20,000 inhabitants must provide all these services and, additionally, police and protection services, social services, firefighting services, and sports facilities. Finally, municipalities with more than 50,000 inhabitants must provide all these previous services and, additionally, public transport and environmental protection services.

2. This is a simple measure, just to control the effect of political ideology. This study does not take the political economy perspective, so a simple dummy variable is enough, instead of using more complex and refined categorical or ordered variables. In Spain, new parties have appeared in the last years; further, nationalist parties are supported in some regions. However, all of them could be placed on the right or left side, with more or less distance to both extremes.

3. Considering model (1) we can represent the change in revenue deviations when the number of female councillors is also changed: (ceteris paribus). Now, we know the value of the two coefficients γ₁ and γ₂, so the change could be expressed as: . This suggests the existence of an inverted U–shaped relationship because that equation represents an inverted parabola. So, the maximum value could be known as follows: 0.3488 . The result of this equation is Fe.councillors = 4.45. This means that increasing the number of women in LGs until 4-5 tend to increase revenue budget deviations (turning worse the financial position); however, including an additional woman (or more) will begin to reduce deviations in budgeted revenues (turning better the financial position).

4. Considering model (1) we can represent the change in expenditure deviations when the number of female councillors is also changed: (ceteris paribus). Now, we know the value of the two coefficients γ₁ and γ₂, so the change could be expressed as: . This suggests the existence of a U–shaped relationship because that equation represents a parabola. So, the minimum value could be known as follows: The result of this equation is Fe.councillors = 6.22. This means that increasing the number of women in LGs until 6-7 tend to reduce expenditure budget deviations (turning worse the financial position); however, including an additional woman (or more) will begin to increase deviations in budgeted expenditures (turning better the financial position).

5. This quota is obligatory only in municipalities with more than 3,000 inhabitants.

Additional information

Notes on contributors

Beatriz Cuadrado-Ballesteros

Beatriz Cuadrado-Ballesteros is Associate Professor in Accounting and Finance at the University of Salamanca, where she earned her PhD in Business. Her research interests are public management and public sector reforms, as well as topics related with political economy. Her work has been published in relevant international journals, such as the Public Management Review, International Review of Administrative Sciences, Policy & Politics, Regional Studies, and Government Information Quarterly, among others. She has attended to several international conferences in accounting and public sector, as well as she was visiting researcher in Edinburgh University Business School (UK) and University of Salerno (Italy).

María Dolores Guillamón

María Dolores Guillamón is Associate Professor in Accounting and Finance at the University of Murcia, where she earned her PhD in Business Science. Her research interests focus on public sector management, public sector accounting, budget transparency, indebtedness, electoral cycles, corruption and budget forecast deviations, among others. Her work has been published in relevant international journals, such as the International Public Management Journal, Accounting, Auditing and Accountability Journal, Government Information Quarterly, Cities or Local Government Studies, among others. She has attended to several international conferences in accounting and public sector, as well as she was visiting researcher in Edinburgh University Business School (UK).

Ana María Ríos

Ana María Ríos is Associate Professor in Public Finance at the University of Murcia, where she earned her PhD in Business Science. Her main lines of research are related to budget transparency, citizen participation, parliamentary control of the budget, corruption and financial management at both the municipal and central government levels. Her work has been published in relevant international journals, such as the Public Choice, The American Review of Public Administration, Government Information Quarterly, Applied Economics or Local Government Studies. She has attended to several international conferences in accounting and public sector, as well as she was visiting researcher in Edinburgh University Business School (UK) and University of Valencia (Spain).