Appointed Public Officials and Local Favoritism: Evidence from the German States

49 Pages Posted: 8 Dec 2017

See all articles by Thushyanthan Baskaran

Thushyanthan Baskaran

University of Goettingen (Gottingen)

Mariana Lopes da Fonseca

Max Planck Institute for Tax Law and Public Finance

Multiple version iconThere are 2 versions of this paper

Date Written: December 7, 2017

Abstract

We study the local favoritism of appointed German state ministers. Matching hand-collected data on ministers’ place of residence to a sample of more than 8,000 west German municipalities during the period 1994–2013, we find that the home municipality of a state minister experiences higher employment growth than control municipalities. Given the institutional context, this effect is ostensibly due to apolitical favoritism (home bias) rather than electoral considerations. We conclude that favoritism may lead to a distortion in the allocation of public resources even in contexts with strong political institutions.

Keywords: Distributive politics, favoritism, employment growth

JEL Classification: D73, H70

Suggested Citation

Baskaran, Thushyanthan and Lopes da Fonseca, Mariana, Appointed Public Officials and Local Favoritism: Evidence from the German States (December 7, 2017). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2017-9. Available at SSRN: https://ssrn.com/abstract=3083925 or http://dx.doi.org/10.2139/ssrn.3083925

Thushyanthan Baskaran

University of Goettingen (Gottingen) ( email )

Platz der Gottinger Sieben 3
Gottingen, D-37073
Germany

Mariana Lopes da Fonseca (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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