The Effect of Public Spending on Local Development Indicators in Quevedo
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Abstract
This study analyzes the impact of public spending on local development in the Quevedo canton during the period 2008–2023. The overall objective is to evaluate the effect of expenditure components (road infrastructure and social sectors) on the local development index (LD). To this end, a quantitative approach was used by estimating linear regression models with annual data. Initially, six expenditure variables were considered (road infrastructure, education, health, citizen security, basic services, and social programs); however, the presence of high multicollinearity prompted the construction of a composite variable called Social, which integrates resources allocated to education, health, security, and basic services. The final model, adjusted with the GVI (road infrastructure) and Social variables, explained 72% of the variability in the LD. The results show that social spending has a positive and highly significant effect on local development, while expenditure on road infrastructure does not have a statistically relevant impact during the period analyzed. Diagnostic tests confirmed the validity of the model and allowed for heteroskedasticity to be controlled for through robust standard errors. These data indicate that prioritizing investment in social sectors is the most effective strategy for strengthening community well-being. It is also recommended that these actions be complemented with adequate planning of physical infrastructure, accompanied by mechanisms for transparency and citizen participation, and that future studies be developed that incorporate dynamic models and institutional variables to broaden our understanding of the factors that influence local progress.
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Leonardo Sebastián Maldonado-Montalvo, Universidad Técnica Estatal de Quevedo - Ecuador
https://orcid.org/0009-0007-8343-7310
Throughout my degree in Economics, I have written research articles, but these have not been published. They were written to hone my research, writing, and analytical skills.
Martha Isabel Cedeño-Moreira, Universidad Técnica Estatal de Quevedo - Ecuador
https://orcid.org/0009-0002-1671-0632
Throughout my degree in Economics, I have written research articles, but these have not been published. They were written to hone my research, writing, and analytical skills.
Félix Lorenzo Gómez-Gutiérrez, Universidad Técnica Estatal de Quevedo - Ecuador
https://orcid.org/0000-0002-3060-5452
Master's degree in Economics and Business Administration and professor at the Universidad Técnica Estatal de Quevedo (UTEQ). My research focuses on applied economics, with an emphasis on regional development, informal trade, migration, and public spending. I have published articles in academic journals and participate in institutional research projects.
José Luis Rivera-Velasco, Universidad Técnica Estatal de Quevedo - Ecuador
http://orcid.org/0000-0001-7564-8934
Master's degree in Economics and research professor at the Quevedo State Technical University (UTEQ). My research interests include multidimensional poverty, migration, local public finance, and regional economic development. I have authored and co-authored articles and academic projects on poverty, employment, and public spending in Ecuador. I combine university teaching with applied research focused on public policy and local development.
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