Abstract

The following article studies the effects of the competition for funds among Chilean municipalities. For this, a group of local officers with experience bidding to the Fondo de Desarrollo Regional (FNDR) was interviewed. Regardless of its local relevance the competition for capital funds has been commonly scrutinized from a hierarchical perspective isolated from the administrative processes that took place before and after the fund's distribution. The article shows that the competition for FNDR funds, despite securing the social return of investment, would favour better-off municipalities with larger populations jeopardizing the accomplishment of its objectives. Also, local projects would tend to seek central government compliance at the expense of what was locally proposed, evidencing an asymmetry between local and central officers. Finally, the competition would encourage the design of projects from a smaller magnitude and more visible for the community, thus affecting the develop-ment of the municipalities and the communities that inhabit them.