Does the balance matter? The gender within government and municipal indebtedness

Abstract

PurposeIt was to investigate whether gender diversity – gender balance – within political municipal government teams affected the municipal indebtedness. Government ideology, the gender of the mayor and the wealth of the municipal environment were considered as moderators.Design/methodology/approachWe used GMM estimators on two dynamic models and a sample of 144 Spanish municipalities with more than 50,000 inhabitants for the period 2013–2022.FindingsGender diversity within government teams reduces the municipal debt. Furthermore, the government right-wing ideology and the female gender of the mayor are robust moderators of the effects of the gender diversity within government teams on institutional indebtedness.Research limitations/implicationsThe differences in financial autonomy and powers to apply public policies by municipalities in the different countries, as well as some differential aspects within the right-wing ideological spectrum, may condition our findings. Within relational demography, gender diversity impacts municipal performance, opening the way to explore other relations in future research.Practical implicationsThe tendency to implement legislation to try to achieve high gender balances within political decision-making bodies generates higher gender diversity, and our research shows that it leads to a better financial performance, a matter of transcendental importance for EU, credit rating agencies, and lenders.Originality/valueThis study provides new knowledge about the effect of gender within political decision-making bodies on municipal budgetary management. It is the first research analysing the impact of gender balance in the strict sense within decision-making bodies on municipal indebtedness.