The scientific literature has used different theoretical arguments and methodological alternatives to attempt to demonstrate whether both electoral turnout and the strength of the incumbent majority influence the cost efficiency of municipal governments, reaching inconclusive results. We provide new arguments and employ a methodology that overcomes some of the limitations of the previous studies. Our research confirms a direct association between electoral turnout and municipal cost efficiency in the Spanish region of Galicia. Moreover, the strength of the incumbent majority has a significant negative effect on cost efficiency, contradicting the frequently used explanations that are based on government inaction or the common-pool problem. KEYWORDS cost efficiency, electoral turnout, municipalities, political strength, stochastic frontier JEL CLASSIFICATION

As men and women are sociologically different, scientific literature attempts to explain differences in public outcomes in terms of the gender of elected representatives. In the municipal sphere, few studies have analyzed the short- and long-run effects of the gender of the mayor and the councillors on global budgetary policy. Our research aims to fill this gap. One of our main findings is that a change from a male to a female mayor, or a change in the proportion of female councillors ideologically alienated from a female mayor, has a significant impact on budgetary policy. We have also verified that the presence of female politicians with a right-wing ideology on a municipal council leads the municipality to lower levels of current expenditure with respect to non-social spending in both the short and the long term.

Unlike the frequent research that analyzes the effects of various demographic, economic and political factors on fiscal deficits of governments, this research focuses on studying whether certain structures of public spending policies are associated with situations of fiscal imbalances. Using a panel data model with endogenous variables and taking into account various socio-economic factors as instruments, we have observed that the spending policies of Basic public services, Social protection and social promotion, Preferential services, and Promotion of economic activity have different significant effects on the position of the budgetary balance in the Spanish municipal governments.

Empirical research has tried to explain the effect of female politicians on various outcomes of political institutions. Few studies have focused on how the gender of politicians may affect institutional fiscal performance. Our research shows that both a female mayor, although with limited effect, and a greater share of female councillors worsen the fiscal performance of Spanish municipalities, which contrasts with the hypotheses raised, which were based on the mainstream of theoretical literature. Furthermore, right‐wing female councillors significantly increase the current budgetary imbalances, and female mayors with the same ideology seem to reduce the level of debt per capita.

Diverse research has analysed the effects of gender in government on public budgetary outcomes using the gender bias approach – gender trait –; however, studies evaluating the gender effects of municipal governments on budgetary solvency using a gender balance approach – gender diversity – are scarce. Our objective was to determine whether gender diversity in Spanish municipal governments affects institutional budgetary solvency, taking into account that the mayor’s gender and the ideology of the government could impede visualizing the effects of diversity because they create heterogeneity. Using both static and dynamic panel data models on a sample of Spanish municipalities with more than 20,000 inhabitants, we found that gender diversity has a positive effect on budgetary solvency when the municipality has a male mayor. However, the effect of gender diversity is negative if the mayor is a woman, which could be explained by the different arguments provided by social identity or social categorization theories. Diversas investigaciones han analizado los efectos del género en el gobierno sobre los resultados presupuestarios públicos utilizando el enfoque de sesgo de género – rasgo de género –; sin embargo, los estudios que evalúan los efectos del género de los gobiernos municipales sobre la solvencia presupuestaria usando un enfoque de equilibrio de género – diversidad de género – son escasos. Nuestro objetivo es conocer si la diversidad de género en los gobiernos municipales españoles afecta a la solvencia presupuestaria institucional, teniendo en cuenta que el género del alcalde y la ideología del gobierno podrían impedir visualizar los efectos de la diversidad, porque generan heterogeneidad. Utilizando tanto un modelo estático como uno dinámico de datos de panel en una muestra de municipios españoles de más de 20.000 habitantes, nuestro principal hallazgo es que la diversidad de género tiene un efecto positivo en la solvencia presupuestaria cuando el municipio tiene un alcalde. Sin embargo, el efecto de la diversidad de género tiene un impacto negativo si el gobierno municipal está encabezado por una alcaldesa, lo que podría encontrar su explicación en diferentes argumentos aportados por las teorías de la identidad social o de la categorización social.