The role of municipal councils in social expenditure: How does politics determine social expenditure?

In 1994, Bolivia, one of the poorest countries in Latin America with an important percentage of indigenous people, started a decentralisation process that transferred responsibilities and resources to local governments: the municipalities. Nowadays, municipalities constitute important actors within the development process of Bolivia since they are in charge of the provision of public services and of strengthening the local economy. Social expenditure in Bolivia has been prioritized due to its effects over human and social development. In a typical multidisciplinary approach, the author borrows concepts from economics, sociology, political science and gender and uses that to investigate the ups and downs of social expenditure. In a research setting contextualised by myriad of changes involving increased democratisation, greater inclusion of indigenous people in political processes, a windfall money from oil resources of which a large part was added to the budgets of local governments, greater involvement of women in political process, the rather innovative possibility to vote a mayor out of office, a general revolt against neo-liberal economic policies, the author of this research paper analyses the effects these changes have on municipal social expenditure in a manner that thrills anyone that takes interest in good governance at the local level. The empirical investigation is quantitative, involving econometrics, but the message that comes from the analyses resonates with all social sciences disciplines.