Auditing Territorial Equity of Social Spending in Emerging Economies: A Bivariate Diagnostic Tool

Territories with the greatest needs in emerging economies often fail to receive social investment transfers, and the absence of diagnostic tools limits the detection of such imbalances. This paper presents the Bivariate Equity Index (BEI) as a low-cost, replicable, and straightforward auditing tool designed to identify efficiency or inefficiency in territorial management by cross-referencing poverty rates and income inequality with per capita social investment at the municipal level. We apply the BEI through a longitudinal case study (2000, 2010, and 2020) conducted in the state of Querétaro, Mexico, using municipal public expenditure records and census microdata from the National Institute of Statistics and Geography (INEGI). Querétaro is a region characterized by high economic growth and persistent internal inequalities. The main findings are threefold. First, over time, the source of imbalance shifted: the generalized public spending deficit observed in the most vulnerable municipalities in 2000 evolved into a more complex scenario by 2020, wherein territories with lower levels of need exhibit potential over-allocation. Second, the state capital, Querétaro, presents a critical misalignment, as it remains trapped in a cycle of high inequality and low per capita social investment. Third, results derived from poverty and inequality analyses differ substantially, suggesting that unidimensional targeting criteria obscure inequality gaps that persist within the social fabric. The BEI does not seek to identify causes but rather to provide public managers and civil society with a diagnostic tool based on a scenario matrix that facilitates the detection of budgetary routines, compares municipal performance, and prioritizes interventions.