Mayoral Quality and Municipal Performance in Brazilian Local Governments

We test the influence of the managerial quality thesis on organizational performance using a panel data set on 827 (out of 853) Brazilian municipalities of the state of Minas Gerais along a six year-period (2003-2008). The intra-country and intra-state comparison allows control for potential institutional, historical, and cultural variables. Local managerial quality is assessed in terms of mayoral education and experience (age and ex-mayor), and municipal performance is operationalized as property tax collected/capita and property tax collected as percentage of total tax revenue. The study covers the last two years of the (2001-2004) mayoral administration and the four years of the (2004-2008) administration. After testing the effect of political, economic and ideological and controlling for other municipal factors, contrary to our expectations, mayoral quality fails to explain property tax collection. On the contrary, political factors seem to explain municipal property tax collection. Specifically, compared to the first three years of mayoral administration, in the last year—that is during mayoral election year—municipalities tend to reduce their property tax collection. We test the influence of managerial quality on organizational performance using a panel data set on 827 (out of 853) Brazilian municipalities of the state of Minas Gerais over a six-year period (2005-2010). The intra-country and intra-state comparison controls for potential institutional, historical, and cultural variables. Local managerial quality is assessed in terms of mayoral education and experience (public and reelection), and municipal performance is operationalized as property tax collected per capita and property tax collected as a percentage of total revenue. The study covers the four years of the 2005-2008 mayoral administration and the first two years of the 2009-2012 administration. After testing the effect of political, economic, and ideological factors and controlling for other municipal factors, we find, contrary to our expectations, that mayoral quality fails to explain variance in property tax collection. Rather, political factors (legislature support and electoral cycle) seem to be more strongly correlated to municipal property tax collection. Specifically, municipalities in which the mayor enjoys more partisan support on the city council tend to collect more property tax. Moreover, compared to the first three years of mayoral administration, in the last year of mayoral administration – that is, during the mayoral election year – municipalities tend to reduce their property tax collection.