Paving the electoral way: Urban infrastructure, partisan politics and civic engagement

Abstract

This paper analyses the incidence of political factors and social capital on the allocation of public investment in the Santiago Metropolitan Area, Chile. Considering panel data on a decentralized investment program distributed through local governments and a program that is geared directly to citizen organizations, the paper explores whether investment is equally subject to electoral concerns and rent seeking under different program designs. Our estimations show that decentralized investment favours aligned municipalities where competition is stronger, but long-lasting local leaders also seek their own benefits. By contrast, transfers directly channelled to beneficiaries are free from political clout and, additionally, there is no sign of capture by organized interests. Based on these results, the paper discusses the implications for metropolitan governance, highlighting the potential role of the local social capital and a two-tier governance scheme to retain the gains from decentralization, acquire economies of scale in metropolitan service provision and reduce the margin for pork barrelling.