The political hourglass: opportunistic behavior in local government policy decisions

Abstract

The aim of this article is to determine whether there is opportunistic behavior in local government decisions related to contracting out, public-private partnership (PPP) and/or public externalization. Analysis of the results obtained from applying a fixed effects panel data model to a sample of 2,274 Spanish municipalities supports the existence of asymmetric opportunistic behavior. Specifically, there is strong evidence that in preelection years, there is less likelihood of contracting out and PPP decisions being approved, and a greater probability of public externalization taking place. In post-election years, an increase in capital spending is associated with a lower probability of contracting out and of PPP. An increase in current spending in preelection years reduces the probability of decisions being taken on contracting out and PPP. These empirical results highlight the extent of opportunistic behavior in selecting management forms for the delivery of local government services.