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Direct democracy and local government efficiency

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  • Asatryan, Zareh
  • De Witte, Kristof

Abstract

This paper studies the role of direct democracy in ensuring efficient and cost effective provision of goods and services in the public sector. The sample consists of the population of municipalities in the German State of Bavaria, where in the mid-1990s considerable direct democratic reforms granted citizens with wide opportunities to directly participate in local affairs through binding initiatives. Using information on the municipal resources and the municipal provision of public goods, and applying a fully non-parametric approach to estimate local government overall efficiency, the analysis shows that more direct democratic activity is associated with higher government efficiency. This result suggests that more inclusive governance through direct decision-making mechanisms may induce more accountable and less inefficient governments. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 14-017.

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Date of creation: 2014
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Handle: RePEc:zbw:zewdip:14017

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Keywords: Direct democracy; Public sector efficiency; Conditional efficiency;

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  1. Lawrence Blume & Jens Müller & Stefan Voigt, 2007. "The Economic Effects of Direct Democracy – A First Global Assessment," CESifo Working Paper Series 2149, CESifo Group Munich.
  2. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
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  7. Asatryan, Zareh & Baskaran, Thushyanthan & Heinemann, Friedrich, 2014. "The effect of direct democracy on the level and structure of local taxes," ZEW Discussion Papers 14-003, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Cazals, Catherine & Florens, Jean-Pierre & Simar, Leopold, 2002. "Nonparametric frontier estimation: a robust approach," Journal of Econometrics, Elsevier, vol. 106(1), pages 1-25, January.
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  15. Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2009. "Voter involvement, fiscal autonomy and public sector efficiency: evidence from German municipalities," Discussion Papers, Research Unit: Market Processes and Governance SP II 2009-02, Social Science Research Center Berlin (WZB).
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  18. Asatryan, Zareh & Baskaran, Thushyanthan & Grigoriadis, Theocharis & Heinemann, Friedrich, 2013. "Direct democracy and local public finances under cooperative federalism," ZEW Discussion Papers 13-038, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  19. Emrouznejad, A. & De Witte, K., 2010. "COOPER-framework: A Unified Standard Process for Non-parametric Projects," Working Papers 18, Top Institute for Evidence Based Education Research.
  20. Kristof De Witte & Mika Kortelainen, 2013. "What explains the performance of students in a heterogeneous environment? Conditional efficiency estimation with continuous and discrete environmental variables," Applied Economics, Taylor & Francis Journals, vol. 45(17), pages 2401-2412, June.
  21. Feld, Lars P & Savioz, Marcel R, 1997. "Direct Democracy Matters for Economic Performance: An Empirical Investigation," Kyklos, Wiley Blackwell, vol. 50(4), pages 507-38.
  22. Emrouznejad, Ali & De Witte, Kristof, 2010. "COOPER-framework: A unified process for non-parametric projects," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1573-1586, December.
  23. Ashworth, John & Geys, Benny & Heyndels, Bruno, 2006. "Determinants of tax innovation: The case of environmental taxes in Flemish municipalities," European Journal of Political Economy, Elsevier, vol. 22(1), pages 223-247, March.
  24. John G. Matsusaka, 2009. "Direct Democracy and Public Employees," American Economic Review, American Economic Association, vol. 99(5), pages 2227-46, December.
  25. Rexford Santerre, 1986. "Representative versus direct democracy: A Tiebout test of relative performance," Public Choice, Springer, vol. 48(1), pages 55-63, January.
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