The Effect of Political Competition on the Provision of Local Public Goods in Mexico

Political competition may have virtuous effects similar to the effect that economic competition has in markets. Using cross-sectional data on local elections in Mexico, we evaluate the effect of political competition on the provision of local public goods, controlling for socio-economic and demographic factors. Evidence suggests that political competition is positively related to the coverage of municipal public services, having a greater effect in those areas with the highest poverty and income inequality conditions.