Análisis del gasto público en Ecuador y su incidencia en elecciones a nivel provincial

Abstract

This article aims to prove that the fiscal policy of the Autonomous Decentralized Provincial Governments (GAD’s) of Ecuador affect the results of sectional elections. The research focuses specifically on the composition of public spending during the electoral periods of 2009 and 2014. In order to look at the relationship between the Budgetary Political Cycle and the re-election of the incumbent, the analysis elaborates a fixed effects Instrumental Variables (VI) model using panel-type data at a provincial level. The model considers the effect of employment, poverty, ideology and political affiliation over the candidate’s electoral performance. It also considers the weight of the Costa, Sierra and Amazonia regions in Ecuador's political culture. In addition, using Núñez (2007) proposed methodology, the study estimates the economic value of each extra vote obtained by a candidate for re-election. Results of the empirical analysis show that the rise of 1 dollar per capita on the incumbent`s investment expenditures increases the vote to be obtained by 0.55%, and that the effect boosts to 0.65% when estimating instrumental variables. Additionally, when comparing per capita investments made by incumbent candidates that won the elections with those that lost it, results show a difference on investment of 16.3% in 2009 and 9.6% in 2014. In 2009, the average cost of each extra vote obtained by the incumbent candidate was USD 644, USD 574 and USD 1,163 in the Costa, Sierra and Amazonia regions. In 2014 this cost drops to USD 623, USD 565 and USD 1,103 in the Costa, Sierra and Amazonia region respectively, this decrease shows that the 2014 elections were less competitive.