Public Sector Efficiency and Political Culture

34 Pages Posted: 9 May 2011

Date Written: January 12, 2011

Abstract

The capability of a country's public sector to provide high-quality goods and services in a cost-effective way is crucial to fostering long-term growth. In this paper we study the determinants of public service efficiency (PSE) and in particular the role of citizens' political values. Indeed, we argue that citizens' willingness to invest time and effort monitoring public affairs is necessary if policy-makers are to be held accountable for what they do and deterred from wasting public resources. Contrary to other papers, our empirical analysis exploits within-country variation, therefore reducing the risk of omitted variable bias and implicitly controlling for differences in formal institutions. First, we compute PSE measures for several public services (namely education, civil justice, healthcare, childcare and waste disposal) for the 103 Italian provinces; then we show that a higher degree of political engagement increases PSE. This remains true even after controlling for the possible endogeneity of political culture. In our analysis, values specifically related to the political sphere are kept distinct from generically pro-social values. Our results suggest that the latter have no independent impact on PSE.

Keywords: public spending, efficiency, culture

JEL Classification: C14, H50, H77, Z13

Suggested Citation

Giordano, Raffaela and Tommasino, Pietro, Public Sector Efficiency and Political Culture (January 12, 2011). Bank of Italy Temi di Discussione (Working Paper) No. 786. Available at SSRN: https://ssrn.com/abstract=1829965 or http://dx.doi.org/10.2139/ssrn.1829965

Raffaela Giordano (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Pietro Tommasino

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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