FROM ALLOCATION TO EFFICIENCY: A DECISION-MAKING ECOSYSTEM FOR MUNICIPAL PUBLIC SPENDING AND INVESTMENT

Decision-making on municipal spending and investment takes place within an administrative routine that precedes budget execution and extends to control and evaluation of results. Local managers operate in an environment shaped by social demands, fiscal constraints, budgetary rules, political pressures, and accountability requirements. In this context, this article aims to analyze how the lenses of agency theory, accountability, performance budgeting, and efficiency explain the factors that condition municipal decision-making on public spending and investment. Based on a Systematic Review, following PRISMA, and a bibliometric analysis of publications from 2016 to 2026 in the Web of Science, Scopus, and ProQuest databases, 174 articles were analyzed and organized into ten clusters. The results indicate that municipal spending efficiency is associated with the conditions under which resources are diagnosed, prioritized, allocated, executed, controlled, and evaluated. Agency theory helps interpret conflicts of interest, information asymmetries, and political incentives involved in defining priorities, goals, and indicators. Accountability encompasses mechanisms of oversight, control, transparency, and responsibility that condition the execution and justification of spending. Performance budgeting links resources, goals, and public delivery, while efficiency reflects the relationship among mobilized resources, budget execution, and achieved results. As a product of this articulation, the article proposes the Decision-Making Ecosystem for Municipal Spending and Investment, EDGIM, as an operationalizable integrative framework organized into latent and observable variables applicable to different Brazilian municipal contexts. Keywords: Municipal public spending; Efficiency; Performance budgeting; Accountability; Agency theory.