Mayoral Quality and Local Public Finance

Abstract

In most local developing settings, the political leader and the municipal manager are embodied in the same figure, the directly elected mayor. This research explores the impact of mayoral quality on local public finances in a developing country. Mayoral quality is operationalized as educational background and job‐related expertise to analyze its impact on two local financial indicators: property tax collection and social spending per capita. The mayoral quality thesis is tested across 40 Colombian municipalities over five years (2000–2004). After considering other political, economic, and external influences, the findings reveal that mayoral quality is associated with greater property tax collection and more social spending per capita. This positive influence, however, decreases under external constraints—such as presence of illegal armed groups. This study demonstrates how much influence the mayor can have when circumstances permit. The findings point to the significance of electing qualified mayors, as decentralization may not directly improve subnational finance. Instead, through decentralization, qualified mayors contribute to improved local public finance.