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Voter Involvement, Fiscal Autonomy and Public Sector Efficiency: Evidence from German Municipalities

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

Abstract

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, although extensive voter involvement may put pressure on policy-makers, it might also send a vague message in that diverging objectives are likely to exist in different groups. Furthermore, 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 (technical) efficiency. Crucially, however, this efficiency-enhancing effect of voter involvement is significantly (positively) affected by local governments? fiscal autonomy.

Suggested Citation

  • Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2008. "Voter Involvement, Fiscal Autonomy and Public Sector Efficiency: Evidence from German Municipalities," ZEW Discussion Papers 08-024, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:7296
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    Keywords

    Civic engagement; Local government; Efficiency; Stochastic frontier analysis; German municipalities; Social capital; Fiscal autonomy;

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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