Does the balance matter? The gender within government and municipal indebtedness

Purpose - It was to investigate whether gender diversity – gender balance – within political municipal government teams affected the municipal indebtedness. Government ideology, the gender of the mayor and the wealth of the municipal environment were considered as moderators. Design/methodology/approach - We used GMM estimators on two dynamic models and a sample of 144 Spanish municipalities with more than 50,000 inhabitants for the period 2013–2022. Findings - Gender diversity within government teams reduces the municipal debt. Furthermore, the government right-wing ideology and the female gender of the mayor are robust moderators of the effects of the gender diversity within government teams on institutional indebtedness. Research limitations/implications - The differences in financial autonomy and powers to apply public policies by municipalities in the different countries, as well as some differential aspects within the right-wing ideological spectrum, may condition our findings. Within relational demography, gender diversity impacts municipal performance, opening the way to explore other relations in future research. Practical implications - The tendency to implement legislation to try to achieve high gender balances within political decision-making bodies generates higher gender diversity, and our research shows that it leads to a better financial performance, a matter of transcendental importance for EU, credit rating agencies, and lenders. Originality/value - This study provides new knowledge about the effect of gender within political decision-making bodies on municipal budgetary management. It is the first research analysing the impact of gender balance in the strict sense within decision-making bodies on municipal indebtedness.