Political Factors and the Efficiency of Municipal Expenditure in Brazil

This study analyses how political and institutional factors affected the performance of municipalities in improving social welfare in Brazil in the period from 1990 to 2000. The model adopts a stochastic production frontier, conditioned by variables related to the provision costs of services and those that can affect municipal efficiency. The results indicated that we can not reject:1) economies of scale; 2) the effect of vote margin in the municipality and the type (first or second) of mandate of elected governor, which indicates a form of patronage; and 3) that local politics and the existence of sectorial boards did not affect the level of efficiency for municipal spending, suggesting an asymmetry of information between politics and voters.