Gender diversity in municipal governmental bodies and budgetary solvency

Abstract

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.

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

“…Similar arguments to those proposed by Cabaleiro and Buch (2023) allow us to hypothesize how higher gender diversity within a government team (the mayor and those ideologically related councillors who elected her/him to the position of mayor and who support her/him politically in the municipal council) could improve the institutional indebtedness. To the best of our knowledge, there is no literature analysing the problem with this as its focus.…”

“…The greater preference for public spending by female leaders leads them to budget for overestimated revenues from taxes (Cuadrado-Ballesteros et al, 2022), which could be difficult to achieve. The greater preference amongst male leaders for lower levels of taxation means that revenues may be insufficient to meet the public spending arising from citizen pressure (Cabaleiro and Buch, 2023). Consequently, the opposing preferences of each sex can counteract the causes generating budget deficits, so institutional debt does not increase.…”

“…Studies on public institutions, using the number or percentage of women, as well as many times the incorrect label of "gender diversity" to refer to the participation level of womenwhich represents a bias rather than a diversity approachhave tried to show whether this greater presence of women may influence tax and spending policies, deficits, and levels of institutional indebtedness (Balaguer-Coll and Toneva, 2019;Buch-G omez, 2020, 2021;Chattopadhyay and Duflo, 2004;Cuadrado-Ballesteros et al, 2024;Park, 2014;Slegten et al, 2019;Suzuki and Avellaneda, 2018). Supported by diverse arguments and theories that we will present later (Dohmen et al, 2011;Krogstrup and W€ alti, 2011), specific research has explored the effects of this greater presence of women in decision-making bodies on municipal indebtedness without conclusive results (Balaguer-Coll and Toneva, 2019;Cabaleiro-Casal and Buch-G omez, 2021;Cuadrado-Ballesteros et al, 2024;Suzuki and Avellaneda, 2018), which Cabaleiro and Buch (2023) justify in that the effects of gender on some derived variables could not be directly observed.…”

“…Based on gender budgetary differences (Alesina and La Ferrara, 2005; Bhalotra and Clots-Figueras, 2014; Chattopadhyay and Duflo, 2004), and with a different approach from gender bias, Cabaleiro and Buch (2023) theorize that a higher gender balance in the decision-making bodies of governments – which represents a strict diversity approach – would affect budgetary solvency. Groups are not diverse by the mere circumstance of having a higher percentage of women, but because individuals of different sexes participate and because of the relevance of each one within the group.…”

“…As the effects of gender diversity on performance may not be visualized if there are heterogeneous groups (van Knippenberg and Schippers, 2007) related to other variables that could have moderating effects (Park, 2021), our study considers the ideology of the government, the gender of the mayor, (Cabaleiro and Buch, 2023) and the wealth level of municipal environment (Duflo, 2012).…”