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The assumption that “local knows best” is one of the main assumptions in favor of decentralization, and perhaps the least understood (Aderman, 2002; Shultz and Libman, 2015). Because local knowledge advantage is assumed, mistargeting is presumed in the literature to be the result of elite capture or clientelist practices. However, to the extent that local authorities might actually not know, misallocations could potentially reflect decisions made on imperfect information.
The paper adds to the literature on local knowledge and political beliefs, addressing the question: do mayors know their municipality and its population needs? The empirical analysis contrasts first-hand data from an original elite survey of Mexican local mayors I conducted in 2016-2017 with census data to assess how well mayors know their municipality and its population needs. The paper also discusses the challenges of measuring “informal” knowledge and its relevance for both theoretical and policy purposes.
Contrary to expectations, mayors’ local knowledge seems to be uncorrelated with education and experience. Still, whether they share the assumption that local knowledge is an advantage only they possess, or they have a political interest in framing it that way, mayors certainly think they know best. Most of mayors reported relying on their team (80%), the people (75%) and their own experience (58%) for information. For instance, although most (82%) reported receiving information from the federal government, and many from the National Statistics Agency (45%), only one-fourth mentioned it as their main source of information and only two mayors mentioned the federal government among those that knew the municipality well. Nevertheless, analysis results show mayors are not always knowledgeable, suggesting that suboptimal subnational decisions may be at least partially the result of inaccurate information.