The effects of the political environment on transparency: evidence from Spanish local governments

Abstract

ABSTRACT This article analyzes the evolution of economic and financial transparency in Spanish local governments (LGs) and their determining factors. The main results show that the level of financial disclosure seems to be the result of pressure from, on the one hand, opposition groups when there is rivalry and political competition, and, on the other hand, the increased demands of citizens involved in public affairs, who want to know how the government is spending their money and how public services are financed. Political parties are therefore key to increasing municipal transparency since greater pressure from opposition parties enhances transparency. Pressure from the parties as well as from citizens positively affects transparency; in other words, the more active people are in terms of voter turnout, and the greater the pressure from and debate among citizens, the higher the level of transparency. One way to increase transparency could therefore be to raise awareness about the importance that citizen pressure can have on governments.