The Myth of Mayoral Leadership in Local Government Resource Allocation: A Multilevel Analysis with Brazilian Municipalities

Abstract

Abstract Resource allocation is paramount to local government strategic planning. There is, however, a gap in studies examining the determining factors of resource allocation decisions in the public sector. This study contributes to the public management literature by providing additional theories for explaining local government resource allocation in a very important sector in the local government context: educational services. Stakeholder theory provides insights into external influences as economic, political, and managerial types. Evidence comes from a panel dataset of large Brazilian municipalities (over 100,000 inhabitants) for the 2009–2016 period. Regression analysis provides empirical evidence that stakeholders can influence decisions about expenditure and investments in infrastructure. The findings challenge the assumption that mayors are at the apex of the local government hierarchy and make solitary decisions. The article also contributes to strategic management theory, indicating that stakeholders are likely to shape local government resource allocation decisions, something that had not been considered as likely hitherto.