‘Keeping up with the (Portuguese) Joneses’—a study on the spatial dependence of municipal expenditure

Abstract

Municipalities tend to replicate the size and the composition of their neighbours’ expenditures, independently of being ruled by left-wing or right-wing parties. This is one important conclusion of the study, which includes spatial dependence to explain the value of Portuguese municipalities’ direct awards. We used observations for the 308 Portuguese municipalities from 2009 to 2015. We then tested this spatial dependence for the mean value (per contract of direct award) and we controlled the results considering the demographic characteristics of each municipality, the political wing of the ruling party at the municipality, and the composition of the municipal expenditures.