The mining canon and the budget political cycle in Peru’s district municipalities, 2002-2011

Pebe, Carol
Radas, Norally
Torres, Javier

2017-12

LC/PUB.2017/24-P
8

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This study seeks to determine whether access to a larger volume of funds from the mining canon affects the level of capital spending by district mayors in election years. The effect of Peru’s electoral cycles on district public investment (from 2002 to 2011), and how this relates to the mining canon, is analysed in terms of the budget political cycle, using a fixed-effects panel model. The results show that the mining canon has a differential effect in the 20% of districts that receive the largest amounts; but, in general, there is no clear cyclicality between capital expenditure in these municipalities and election years.

EJECUCION PRESUPUESTARIA; ASPECTOS POLITICOS; ELECCIONES; ELECTIONS; POLITICAL ASPECTS; BUDGET PERFORMANCE; PUBLIC EXPENDITURES; MUNICIPAL GOVERNMENT; LOCAL GOVERNMENT; TAX REVENUES; MINING; GOBIERNO LOCAL; GOBIERNO MUNICIPAL; GASTOS PUBLICOS; INGRESOS FISCALES; MINERIA;