Political competition, electoral participation and local fiscal performance

Existing literature argues that political competition and electoral participation influence government efficiency. However, empirical evidence on the matter for developing countries is scant mixed. This paper contributes to by exploring impact of fiscal performance 1,098 Colombian municipalities during four periods (2000-2015). Using a fixed effect panel data model, we find significant positive relationship between composite index. To be more precise, our results indicate have lower concentration council seats in hands few parties (i.e. Herfindahl-Hirschman Index) higher voter turnout rates tend perform better. These are explained operating expenses, local revenue generation, investment savings. Overall, these findings support accountability theories, which argue incentivize career-concerned politicians well reduce rent-extraction behavior.