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Public Sector Efficiency: The Roles of Political and Budgetary Institutions, Fiscal Capacity and Democratic Participation

Author

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  • Lars-Erik Borge

    (Department of Economics, Norwegian University of Science and Technology)

  • Torberg Falch

    (Department of Economics, Norwegian University of Science and Technology)

  • Per Tovmo

    (Department of Economics, Norwegian University of Science and Technology)

Abstract

The purpose of this paper is to investigate whether efficiency in public service provision is affected by political and budgetary institutions, fiscal capacity, and democratic participation. In order to address this issue we take advantage of a new global efficiency measure for Norwegian local governments. There is strong evidence that high fiscal capacity and a high degree of party fragmentation contributes to low efficiency. In addition we find that increased democratic participation tends to increase efficiency, while a centralized top down budgetary process is associated with low efficiency.

Suggested Citation

  • Lars-Erik Borge & Torberg Falch & Per Tovmo, 2007. "Public Sector Efficiency: The Roles of Political and Budgetary Institutions, Fiscal Capacity and Democratic Participation," Working Paper Series 8407, Department of Economics, Norwegian University of Science and Technology.
    • Handle: RePEc:nst:samfok:8407
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    More about this item

    Keywords

    Public sector efficiency; Political and budgetary institutions; Fiscal capacity; Democratic Participation;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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