Rethinking Public Auditing Institutions: Empirical Evidence from Swiss Municipalities
AbstractIn the economic literature various political institutions designed to control the government have been analyzed. However, an important institution has been neglected so far: independent auditing institutions with an extended mandate to analyze the budget draft and individual policy proposals. We argue that auditors with an extended mandate improve transparency and provide essential information on the impact of policy proposals on common pool resources. This leads to less wasteful spending and a more efficient allocation of public resources. We empirically analyze the policy impact of local auditors with an extended audit mandate in Switzerland. Auditors, who can evaluate and criticize policy proposals ex ante to policy decisions, significantly reduce the general tax burden and public expenditures. We find similar results with different datasets. These results are robust to various changes in the econometric specification.
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Bibliographic InfoPaper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2008-06.
Date of creation: Mar 2008
Date of revision:
auditor; audit court; special interests; political economics; public finance;
Other versions of this item:
- Mark Schelker & Reiner Eichenberger, 2008. "Rethinking public auditing institutions: Empirical evidence from Swiss municipalities," Working Papers 2008/3, Institut d'Economia de Barcelona (IEB).
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- H10 - Public Economics - - Structure and Scope of Government - - - General
This paper has been announced in the following NEP Reports:
- NEP-ACC-2008-04-12 (Accounting & Auditing)
- NEP-ALL-2008-04-12 (All new papers)
- NEP-CDM-2008-04-12 (Collective Decision-Making)
- NEP-PBE-2008-04-12 (Public Economics)
- NEP-POL-2008-04-12 (Positive Political Economics)
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- 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.
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