Organizational capacity is expected to contribute to a well-functioning government. However,
the public management literature offers few objective measures of organizational capacity and
scarce empirical analysis of the organizational capacity-government performance relationship.
To address these gaps, this study objectively measures organizational capacity across three
dimensions—capability, expertise, and human resources—and tests the effect of organizational
capacity on government effectiveness in securing infrastructure grants. The study relies on a
data set of approximately 54,000 infrastructural grant proposals submitted by 340 (out of 345)
Chilean municipalities during a nine-year period (2005–13), covering three mayoral administrations.
Controlling for past performance and other grant and municipal features, results suggest
that municipal effectiveness is positively influenced by both administrative capacity and political
factors. Findings are robust across alternative model specifications.
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