Fiscal Reform in Spanish Municipalities: Gender Differences in Budgetary Adjustment

Do gender differences matter for politicians' budgetary behaviour when confronted with institutional change? Following Spain's 2013 municipal reform, municipalities with more than 20,000 inhabitants lost responsibility for social services provision. Using a difference-in-differences design on municipalities in the Madrid region from 2010 to 2019, we find no effect of female representation on social services spending in the absence of the reform. Once the reform is taken into account, however, social services spending falls significantly in treated municipalities, and the decline is smaller where the share of female politicians is higher: governments with a female share of about 30% cut spending by an amount equivalent to more than 50% of average social services spending, whereas those with a 45% female share reduce spending by less than 20%. These findings suggest that female politicians are more likely to protect social services spending at the municipal level as responsibilities shift to the regional level.