How Do Mayors’ Ties to Business Sectors Impact Security Policies?

• In Event: Mixed Methods in Comparative Politics

Abstract

How do close business ties impact local governments? I examine the impact of mayors' business ties on municipal budget allocation for public safety policies. I argue that when mayors have a close relationship with private sector actors, local government tends to favor policies that benefit private actors. Furthermore, I assert that close business ties moderate the influence of partisanship on policies. For instance, while 'tough-on-crime' policies are less common among left-wing mayors, close ties with the business sector makes security more salient for these mayors.

I test this argument by analyzing Chilean municipalities from 2016 to 2023. I explore how mayors’ links to commerce, tourism, and manufacturing affect the allocation of municipal resources for public safety policies. Local administration is crucial for these industries as their success relies heavily on public safety. For instance, in more dangerous cities there is less consumption and fewer tourists. Consequently, the economic elite in these sectors has a keen interest in how well the municipality handles public safety. Thus, I expect mayors with close ties to elite members of these sectors to prioritize security and policing programs more.

To evaluate the impact of business connections on security policies, I use a regression discontinuity design in close elections. I compare changes in security spending between municipalities with mayors connected to businesses and those without such connections, where the election had a closely defeated candidate. To measure the relationship between the mayor and the economic sector, I evaluate whether board members from industries contribute to mayoral election campaigns. This connection is obtained from two primary sources. First, campaign donation data became publicly available after a 2015 reform mandating donor disclosure. This allows me to analyze two municipal administration cycles related to the 2016 and 2021 elections. Second, the Ministry of Economy maintains a record of all business organizations in Chile on its website, providing details such as names of board members, the economic sector of the organization, location, and other pertinent information. After collecting information from more than 5,400 business associations, I match both datasets using the names of donors and board members to determine whether a member from a business organization is in the donor pool of each local candidate.

Consistent with my expectations, the findings reveal that mayors prioritize spending on public security to a greater extent when they have strong ties with industries that depend on local public safety programs. Business connections increase spending on security programs and, additionally, on urban infrastructure investments made by municipalities to enhance public spaces' resilience to crime. Furthermore, the results indicate that business ties elevate spending levels among mayors without prior policy preferences towards security, such as left-wing mayors.

This study emphasizes that in the context of centralized countries where taxation primarily occurs at the national level, economic actors are still keenly interested in local government performance, particularly in domains that directly affect their businesses. Furthermore, this research underscores that even in the context of an institutionalized party system like Chile's, the connection of local politicians with economic elite shapes policies, regardless of the partisanship of mayors.

Author

• Jaime Lindh, University of North Carolina at Chapel Hill