Public Management Quality Index for Municipalities in Peru

This study develops an index to measure the quality of public management in district and provincial municipalities in Peru between 2012 and 2021. The indicator is constructed on the assumption that the concept of quality has two essential dimensions: efficiency in resource management and the capacity to implement public policies and provide public services. First, the study shows that, on average, the quality of public management at the provincial and district levels improved between 2012 and 2021, despite a notable setback in 2019. These improvements have been driven by progress in both dimensions (efficiency and capacity). Second, the data suggest that there is a convergence effect in the quality of municipal governance over time, and that greater efficiency is correlated with greater capacity within the same municipality. Finally, three exploratory analyses are conducted to illustrate avenues for future research using this indicator. The first shows that there is a positive relationship between (i) the quality of district governance within a province and (ii) the quality of governance of the respective provincial municipality. The second exercise reveals a weak negative relationship between the monetary poverty rate in 2018 and the average quality of public governance between 2012 and 2018. The third exercise documents that higher quality of public management in districts prior to the 2014 municipal elections was associated with the electoral victory of mayors seeking reelection. Thus, the indicator can be used in further research to better understand the effects of high-quality public management and its relationship to social and political outcomes in Peru.