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The median voter didn't show up: Costly meetings and insider rents

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  • Saiz, Albert

Abstract

How does changing from an assembly to a town-council form of government affect the way in which cities are run? Previous empirical research on this question has not found much of an impact of assemblies on aggregate outcomes such as local public expenditures or taxation. Nevertheless, the specific role of organized insiders may be important to understand how cities and towns governed by citizens' assemblies work. Existing surveys point to local workers as an important pressure group in local assemblies. Using data from local governments in New England I find that municipalities governed by assemblies pay around 4% to 10% higher salaries to their employees. This wage premium is bigger in assemblies with lower attendance, and increasing with the employees' voting power. I prove my results robust to the inclusion of an exogenous representative-government comparison group: municipalities in New York State that lie within 40 miles of the border with New England. The results demonstrate how insider groups derive some advantages from an assembly form of government. More broadly, the potential capture of assemblies by insider groups can be an important risk faced by municipalities with low citizen participation, which provides a rationale for the widespread adoption of representative government at the local level.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 41 (2011)
Issue (Month): 5 (September)
Pages: 415-425

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Handle: RePEc:eee:regeco:v:41:y:2011:i:5:p:415-425

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Web page: http://www.elsevier.com/locate/regec

Related research

Keywords: Local public finance Town management Assemblies;

References

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  1. Hoxby, Caroline M., 1999. "The productivity of schools and other local public goods producers," Journal of Public Economics, Elsevier, vol. 74(1), pages 1-30, October.
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  4. Turner, Matthew & Weninger, Quinn, 2005. "Meetings with Costly Participation: An Empirical Analysis," Staff General Research Papers 11464, Iowa State University, Department of Economics.
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  13. Rexford Santerre, 1989. "Representative versus direct democracy: Are there any expenditure differences?," Public Choice, Springer, vol. 60(2), pages 145-154, February.
  14. Pommerehne, Werner W & Schneider, Friedrich, 1978. "Fiscal Illusion, Political Institutions, and Local Public Spending," Kyklos, Wiley Blackwell, vol. 31(3), pages 381-408.
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