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Auditor Terms and Term Limits in the Public Sector: Evidence from the US States

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  • Mark Schelker

Abstract

Improving transparency and enabling the principal to hold its agents accountable is a major issue in any principal agent relationship. This paper focuses on the role of public auditors in this task and presents evidence on the impact of auditor term length and term limits on government performance at the US State level. While the empirical results for the influence of term length are ambiguous, I find strong evidence for a positive and significant influence of term limits on state credit ratings. Auditors who face a binding term limit seem to be more effective monitors, which improves credit ratings.

Suggested Citation

  • Mark Schelker, 2009. "Auditor Terms and Term Limits in the Public Sector: Evidence from the US States," CREMA Working Paper Series 2009-19, Center for Research in Economics, Management and the Arts (CREMA).
  • Handle: RePEc:cra:wpaper:2009-19
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    References listed on IDEAS

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    Cited by:

    1. Mark Schelker, 2012. "The influence of auditor term length and term limits on US state general obligation bond ratings," Public Choice, Springer, vol. 150(1), pages 27-49, January.

    More about this item

    Keywords

    Direct Democracy; public auditor; tenure length; term limit; governance;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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