Description:
AbstractI use close municipal elections in a nonparametric regression discontinuity framework to study the organizational dimension of local public investment following a decentralization reform in Peru. National political organizations' mayors winning by very narrow margins approve and execute larger investments than those of other types of parties; they also choose structures, systems, and personnel more conducive to active investment, engage in beneficial contracting relationships with outside funding sources, and achieve more stable financial and social performance. Evidence on the consequential influence of national parties only after the decentralization reform, with their aggregate investment implications, is discussed.