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Independent and competing agencies: An effective way to control government

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  • Reiner Eichenberger
  • Mark Schelker

    ()

Abstract

Controlling government is a primary focus of the politico-economic literature. Recently, various political institutions have been analyzed from this perspective, most importantly balanced budget rules, fiscal federalism, and direct democracy. However, one type of institution has been neglected so far: elected competitors to the government. Such institutional competition between the government and an independent agency can be found at the Swiss local level, where finance Commissions compete with the government. In some parts of Switzerland, local finance commissions can ex ante criticize government projects and bring alternative policy proposals onto the political agenda, which are then voted on by the citizens. Thus, they become strong competitors to the government. We econometrically investigate this institutional setting by comparing the 26 Swiss cantons. We find the power of the local finance commission to have an economically relevant, statistically significant and robust negative effect on the tax burden and on public expenditures. Copyright Springer Science + Business Media B.V. 2007

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 130 (2007)
Issue (Month): 1 (January)
Pages: 79-98

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Handle: RePEc:kap:pubcho:v:130:y:2007:i:1:p:79-98

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Web page: http://www.springerlink.com/link.asp?id=100332

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Keywords: Political economics; Political control institution; Institutional competition; Audit court;

References

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Citations

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Cited by:
  1. Torgler, Benno & Schaltegger, Christoph A, 2006. "The Determinants of Political Discussion: How important are audit courts and local autonomy?," Berkeley Olin Program in Law & Economics, Working Paper Series qt34v756hb, Berkeley Olin Program in Law & Economics.
  2. Bruno S. Frey, 2011. "Tullock Challenges: Happiness, Revolutions and Democracy," CESifo Working Paper Series 3460, CESifo Group Munich.
  3. Baskaran, Thushyanthan, 2010. "On the Link Between Fiscal Decentralization and Public Debt in OECD Countries," MPRA Paper 21599, University Library of Munich, Germany.
  4. Blume, Lorenz & Voigt, Stefan, 2011. "Does organizational design of supreme audit institutions matter? A cross-country assessment," European Journal of Political Economy, Elsevier, vol. 27(2), pages 215-229, June.
  5. Mark Schelker, 2012. "The influence of auditor term length and term limits on US state general obligation bond ratings," Public Choice, Springer, vol. 150(1), pages 27-49, January.
  6. Lars Feld & Gebhard Kirchgässner & Christoph Schaltegger, 2011. "Municipal debt in Switzerland: new empirical results," Public Choice, Springer, vol. 149(1), pages 49-64, October.
  7. Schelker, Mark & Eichenberger, Reiner, 2010. "Auditors and fiscal policy: Empirical evidence on a little big institution," Journal of Comparative Economics, Elsevier, vol. 38(4), pages 357-380, December.
  8. Matthias Benz & Bruno S. Frey, . "Corporate Governance: What can we Learn from Public Governance?," IEW - Working Papers 166, Institute for Empirical Research in Economics - University of Zurich.
  9. Lorenz Blume & Stefan Voigt, 2007. "Supreme Audit Institutions: Supremely Superfluous? A Cross Country Assessment," ICER Working Papers 03-2007, ICER - International Centre for Economic Research.
  10. Bruno Frey, 2008. "Outside and inside competition for international organizations—from analysis to innovations," The Review of International Organizations, Springer, vol. 3(4), pages 335-350, December.

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