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Voter involvement, fiscal autonomy and public sector efficiency: evidence from German municipalities
[Wähler-Beteiligung, Finanzhoheit und Effizienz des öffentlichen Sektors: Aussagen von deutschen Kommunen]

  • Geys, Benny
  • Heinemann, Friedrich
  • Kalb, Alexander

Social and/or political involvement within the population is often argued to enhance public sector performance. The underlying idea is that engagement fosters political awareness and interest and increases the public’s monitoring ability. Still, weak fiscal autonomy can undermine voters’ interest in and demand for an efficient production of public services. In our contribution, we test whether and how voter involvement in the political sphere is related to government performance – in terms of its efficiency – using a broad panel of German municipalities. Our results suggest that voter involvement indeed has a positive impact on cost efficiency. Crucially, however, this efficiency-enhancing effect of voter involvement is significantly positively affected by local governments’ fiscal autonomy.

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Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Processes and Governance with number SP II 2009-02.

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Date of creation: 2009
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Handle: RePEc:zbw:wzbmpg:spii200902
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