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

28 Pages Posted: 17 Apr 2008 Last revised: 12 Jan 2011

See all articles by Benny Geys

Benny Geys

Vrije Universiteit Brussel (VUB)

Friedrich Heinemann

ZEW – Leibniz Centre for European Economic Research; University of Heidelberg - Alfred Weber Institute for Economics

Alexander Kalb

ZEW – Leibniz Centre for European Economic Research

Date Written: 2008

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.

Keywords: Civic engagement, Local government, Efficiency, Stochastic frontier analysis, German municipalities, Social capital, Fiscal autonomy

JEL Classification: H11, H40

Suggested Citation

Geys, Benny and Heinemann, Friedrich and Kalb, Alexander, Voter Involvement, Fiscal Autonomy and Public Sector Efficiency: Evidence from German Municipalities (2008). ZEW - Centre for European Economic Research Discussion Paper No. 08-024, Available at SSRN: https://ssrn.com/abstract=1121745 or http://dx.doi.org/10.2139/ssrn.1121745

Benny Geys (Contact Author)

Vrije Universiteit Brussel (VUB) ( email )

Pleinlaan 2
http://www.vub.ac.be/
Brussels, 1050
Belgium

Friedrich Heinemann

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

HOME PAGE: http://www.zew.de

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

Alexander Kalb

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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