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Fiscal Consequences of Electoral Institutions

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  • Christopher R. Berry
  • Jacob E. Gersen
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    Abstract

    There are more than 500,000 elected local government officials in the United States. The most electorally dense county has more than 20 times the average number of elected officials per capita. This paper offers the first systematic investigation of the link between electoral density and fiscal outcomes. Electoral density presents a tradeoff between accountability and monitoring costs. Increasing the number of specialized elected offices promotes issue unbundling, reducing slack between citizen preferences and government policy; but the costs of monitoring a larger number of officials may offset these benefits, producing greater latitude for politicians to pursue their own goals at the expense of citizen interests. We predict diminishing returns to electoral density and a -shaped relationship between the number of elected local officials and government fidelity to citizen preferences. We find that public sector size decreases with electoral density up to a point, beyond which budgets grow as more officials are added. (c) 2009 by The University of Chicago. All rights reserved..

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    Bibliographic Info

    Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

    Volume (Year): 52 (2009)
    Issue (Month): 3 (08)
    Pages: 469-495

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    Handle: RePEc:ucp:jlawec:v:52:y:2009:i:3:p:469-495

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    Web page: http://www.journals.uchicago.edu/JLE/

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    Cited by:
    1. William Doerner & Keith Ihlanfeldt, 2011. "City government structure: are some institutions undersupplied?," Public Choice, Springer, vol. 149(1), pages 109-132, October.
    2. Baber, William R. & Gore, Angela K. & Rich, Kevin T. & Zhang, Jean X., 2013. "Accounting restatements, governance and municipal debt financing," Journal of Accounting and Economics, Elsevier, vol. 56(2), pages 212-227.

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