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Declared vs. revealed yardstick competition: local government efficiency in Norway

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Author Info
Tovmo Per
Revelli Federico () (University of Turin)

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Abstract

This paper investigates whether the production efficiency of Norwegian local governments exhibits a spatial pattern that is compatible with the hy­pothesis of yardstick competition. In order to check whether yardstick com­petition is really responsible far the observed spatial pattern, and to rule out alternative theoretical explanations, the paper exploits unique information from a survey on Norwegian local governments, where local public officials are explicitly asked whether they compare their own performances in the provision of public services to those of other governments (benchmarking). Merging the latter information - "declared" yardstick competition - with the observed interdependence in local efficiency measures - "revealed" yardstick competition - the paper provides evidence that comparative performance evaluation generates spatial auto-correlation in local efficiency indicators.

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Paper provided by University of Turin in its series Department of Economics Working Papers with number 200605.

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Length: 25 pages
Date of creation: May 2006
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Handle: RePEc:uto:dipeco:200605

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  1. Bordignon, Massimo & Cerniglia, Floriana & Revelli, Federico, 2004. "Yardstick competition in intergovernmental relationships: theory and empirical predictions," Economics Letters, Elsevier, vol. 83(3), pages 325-333, June. [Downloadable!] (restricted)
  2. Babcock, Linda & Engberg, John & Greenbaum, Robert, 2005. "Wage spillovers in public sector contract negotiations: the importance of social comparisons," Regional Science and Urban Economics, Elsevier, vol. 35(4), pages 395-416, July. [Downloadable!] (restricted)
  3. Besley, Timothy & Case, Anne, 1995. "Incumbent Behavior: Vote-Seeking, Tax-Setting, and Yardstick Competition," American Economic Review, American Economic Association, vol. 85(1), pages 25-45, March. [Downloadable!] (restricted)
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  4. Strom, Bjarne, 1995. "Envy, Fairness and Political Influence in Local Government Wage Determination: Evidence from Norway," Economica, London School of Economics and Political Science, vol. 62(247), pages 389-409, August. [Downloadable!] (restricted)
  5. De Borger, B, et al, 1994. " Explaining Differences in Productive Efficiency: An Application to Belgian Municipalities," Public Choice, Springer, vol. 80(3-4), pages 339-58, September.
  6. Revelli, Federico, 2006. "Performance rating and yardstick competition in social service provision," Journal of Public Economics, Elsevier, vol. 90(3), pages 459-475, February. [Downloadable!] (restricted)
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  7. Carol Propper & Deborah Wilson, 2003. "The Use and Usefulness of Performance Measures in the Public Sector," The Centre for Market and Public Organisation 03/073, Department of Economics, University of Bristol, UK. [Downloadable!]
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  8. Anselin, Luc & Bera, Anil K. & Florax, Raymond & Yoon, Mann J., 1996. "Simple diagnostic tests for spatial dependence," Regional Science and Urban Economics, Elsevier, vol. 26(1), pages 77-104, February. [Downloadable!] (restricted)
  9. Bivand, Roger & Szymanski, Stefan, 2000. "Modelling the spatial impact of the introduction of Compulsory Competitive Tendering," Regional Science and Urban Economics, Elsevier, vol. 30(2), pages 203-219, March. [Downloadable!] (restricted)
  10. Nouriel Roubini & Jeffrey Sachs, 1989. "Government Spending and Budget Deficits in the Industrial Economies," NBER Working Papers 2919, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Jørn Rattsø & Rune J. Sørensen, 2004. "Public Employees as Swing Voters: Empirical Evidence on Opposition to Public Reform," Public Choice, Springer, vol. 119(3_4), pages 281-310, 06. [Downloadable!]
  12. Ashworth, John & Heyndels, Bruno, 1997. "Politicians' preferences on local tax rates: An empirical analysis," European Journal of Political Economy, Elsevier, vol. 13(3), pages 479-502, September. [Downloadable!] (restricted)
  13. Geys, Benny, 2006. "Looking across borders: A test of spatial policy interdependence using local government efficiency ratings," Journal of Urban Economics, Elsevier, vol. 60(3), pages 443-462, November. [Downloadable!] (restricted)
  14. Moene, Karl O., 1986. "Types of bureaucratic interaction," Journal of Public Economics, Elsevier, vol. 29(3), pages 333-345, April. [Downloadable!] (restricted)
  15. Sole Olle, Albert, 2003. "Electoral accountability and tax mimicking: the effects of electoral margins, coalition government, and ideology," European Journal of Political Economy, Elsevier, vol. 19(4), pages 685-713, November. [Downloadable!] (restricted)
  16. repec:rus:hseeco:122160 is not listed on IDEAS
  17. Hanna Ågren & Matz Dahlberg & Eva Mörk, 2007. "Do politicians’ preferences correspond to those of the voters? An investigation of political representation," Public Choice, Springer, vol. 130(1), pages 137-162, January. [Downloadable!] (restricted)
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  18. Aronsson, Thomas & Blomquist, Soren & Sacklen, Hans, 1999. "Identifying Interdependent Behaviour in an Empirical Model of Labour Supply," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(6), pages 607-26, Nov.-Dec.. [Downloadable!]
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  19. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Blackwell Publishing, vol. 60(3), pages 531-42, July. [Downloadable!] (restricted)
  20. Federico Revelli, 2005. "On Spatial Public Finance Empirics," International Tax and Public Finance, Springer, vol. 12(4), pages 475-492, August. [Downloadable!] (restricted)
  21. Jorid Kalseth & Jørn Rattsø, 1998. "Political Control of Administrative Spending: The Case of Local Governments in Norway," Economics and Politics, Blackwell Publishing, vol. 10(1), pages 63-83, 03. [Downloadable!] (restricted)
  22. SALMON, Pierre, 1987. "Decentralization as an incentive scheme," Institut des Mathématiques Economiques – Document de travail de l’I.M.E. (1974-1993) 98, Institut des Mathématiques Economiques. LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS, Université de Bourgogne.
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  23. Bivand, Roger & Szymanski, Stefan, 1997. "Spatial dependence through local yardstick competition:: theory and testing," Economics Letters, Elsevier, vol. 55(2), pages 257-265, August. [Downloadable!] (restricted)
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