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The determination of local public expenditures and the principal and agent relation: A case study

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  • Sharon Megdal

Abstract

The principal and agent relationship is important in the public sector. There, elected or appointed representatives act on behalf of the citizens of their jurisdictions. This paper examines the importance of the budget referendum, which allows the principals to approve or disapprove the proposal of a set of agents, in the context of local public expenditure decisions. We test the null hypothesis that the institution of referendum, when compared to a nonreferendum institution, does not lead to significantly different expenditure behavior. Copyright Martinus Nijhoff Publishers 1983

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  • Sharon Megdal, 1983. "The determination of local public expenditures and the principal and agent relation: A case study," Public Choice, Springer, vol. 40(1), pages 71-87, January.
    • Handle: RePEc:kap:pubcho:v:40:y:1983:i:1:p:71-87
    DOI: 10.1007/BF00174997
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    References listed on IDEAS

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    1. Bergstrom, Theodore C & Goodman, Robert P, 1973. "Private Demands for Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 280-296, June.
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    9. Werner W. Pommerehne & Friedrich Schneider*, 1978. "Fiscal Illusion, Political Institutions, And Local Public Spending," Kyklos, Wiley Blackwell, vol. 31(3), pages 381-408, August.
    10. David Shapiro & Robert Shelton, 1977. "The application of an agency decisionmaking model," Public Choice, Springer, vol. 32(1), pages 51-65, December.
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    Cited by:

    1. Randall Holcombe & Lawrence Kenny, 2008. "Does restricting choice in referenda enable governments to spend more?," Public Choice, Springer, vol. 136(1), pages 87-101, July.
    2. Lorenz Blume & Thomas Döring & Stefan Voigt, 2011. "Fiscal Effects of Reforming Local Constitutions," Urban Studies, Urban Studies Journal Limited, vol. 48(10), pages 2123-2140, August.
    3. Phuong Nguyen-Hoang, 2012. "Fiscal effects of budget referendums: evidence from New York school districts," Public Choice, Springer, vol. 150(1), pages 77-95, January.
    4. David Carassus, 2006. "La ville comme lieu de gouvernance," Post-Print hal-03079970, HAL.
    5. Sarani Saha, 2011. "City-level analysis of the effect of political regimes on public good provision," Public Choice, Springer, vol. 147(1), pages 155-171, April.
    6. Rexford Santerre, 1989. "Representative versus direct democracy: Are there any expenditure differences?," Public Choice, Springer, vol. 60(2), pages 145-154, February.
    7. Lars P. Feld & John G. Matsusaka, 2000. "Budget Referendums and Government Spending: Evidence from Swiss," CESifo Working Paper Series 323, CESifo.
    8. Feld, Lars P & Kirchgassner, Gebhard, 2001. "Does Direct Democracy Reduce Public Debt? Evidence from Swiss Municipalities," Public Choice, Springer, vol. 109(3-4), pages 347-370, December.
    9. Aguiar-Conraria, Luís & Magalhães, Pedro C., 2010. "How quorum rules distort referendum outcomes: Evidence from a pivotal voter model," European Journal of Political Economy, Elsevier, vol. 26(4), pages 541-557, December.
    10. Rexford Santerre, 1986. "Representative versus direct democracy: A Tiebout test of relative performance," Public Choice, Springer, vol. 48(1), pages 55-63, January.
    11. Blume Lorenz & Döring Thomas & Voigt Stefan, 2008. "Fiskalische Effekte der Kommunalverfassungsreformen der 1990er Jahre in Deutschland / Reforming Local Constitutions in Germany during the 1990s – Their Fiscal Effects," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(4), pages 317-344, August.
    12. Sharon Bernstein Megdal, 1983. "Equalization of Expenditures and the Demand for Local Public Education: The Case of New Jersey," Public Finance Review, , vol. 11(3), pages 365-376, July.
    13. Rhee, Se-Koo, 1996. "The impact of intergovernmental grants-in-aid on public school expenditure under the segregated school system," ISU General Staff Papers 1996010108000012396, Iowa State University, Department of Economics.
    14. Gebhard Kirchgassner, 2002. "The effects of fiscal institutions on public finance: a survey of the empirical evidence," Chapters, in: Stanley L. Winer & Hirofumi Shibata (ed.), Political Economy and Public Finance, chapter 9, Edward Elgar Publishing.
    15. Feld, Lars P. & Kirchgassner, Gebhard, 2000. "Direct democracy, political culture, and the outcome of economic policy: a report on the Swiss experience," European Journal of Political Economy, Elsevier, vol. 16(2), pages 287-306, June.
    16. Feld, Lars P. & Matsusaka, John G., 2003. "Budget referendums and government spending: evidence from Swiss cantons," Journal of Public Economics, Elsevier, vol. 87(12), pages 2703-2724, December.
    17. Fischer, Justina A.V., 2007. "The Impact of Direct Democracy on Public Education: Evidence for Swiss Students in Reading, Mathematics and Natural Science," SSE/EFI Working Paper Series in Economics and Finance 688, Stockholm School of Economics.

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