The fiscal situation of the local governments is the result of several political and economic circumstances. Thus, socioeconomic factors (population and economic level, among others) are not enough to explain public sector behaviour, but the political structure also plays an outstanding role. In this line of research, theoretical and empirical literature has investigated the impact of the political system, conflicts between decision-makers within governments and ideological differences on governments’ financial management. Using this approach, in this work we evaluate the long- term evolution of the expenditures, taxes and budgetary deficit/surplus in Spain, showing the impact of the ideology and the political strength in the municipal finances. Also, and following the existent literature, we also consider the economic level and population as relevant socioeconomic variables. We conclude that the municipal financial management does not depend on the political (left / right) sign or the government’s political strength, while the economic level and the population influence positively in the total of expenditures and taxes. Finally, the budgetary deficit/surplus is independent of our explanatory variables.
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