Supreme Audit Institutions: Supremely Superfluous? A Cross Country Assessment

ICER Working Paper No. 3/2007

30 Pages Posted: 28 Feb 2007

See all articles by Lorenz Blume

Lorenz Blume

Phillips University Marburg

Stefan Voigt

University of Hamburg - Institute of Law & Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: March 2007

Abstract

This is the first study that assesses the economic effects of supreme audit institutions (SAIs) on a cross country basis. Drawing on two distinct sources (a survey carried out by the International Organization of the SAIs in the early 90ies and an OECD/World Bank Survey of Budget Practices and Procedures carried out in 2003), the effects of SAIs on three groups of economic variables are estimated, namely on (1) fiscal policy, on (2) government effectiveness, and on (3) productivity. On the basis of up to 40 countries, differences in the independence, the mandate, the implementation record, and the organizational model of the SAIs do not seem to have any clear-cut effect on any of the three groups of dependent variables. There is only one exception: perceived levels of corruption (an aspect of government effectiveness) are significantly higher if the SAI is structured along the court model of auditing. Although in isolation the number of observations appears to be quite low, we argue that the results are unlikely to significantly change if the number of observations is increased for two reasons: the two surveys cover different sets of countries and the individual significance levels are usually extremely low indicating that the structure of SAIs could, indeed, be completely superfluous for the effectiveness of these organizations.

Keywords: Supreme Audit Institutions, Positive Constitutional Economics, Economic Effects of Constitutions

JEL Classification: H10, H30, H50, H80, M49

Suggested Citation

Blume, Lorenz and Voigt, Stefan, Supreme Audit Institutions: Supremely Superfluous? A Cross Country Assessment (March 2007). Available at SSRN: https://ssrn.com/abstract=965434 or http://dx.doi.org/10.2139/ssrn.965434

Lorenz Blume

Phillips University Marburg ( email )

Am Plan 2
Marburg, D-35037
Germany

Stefan Voigt (Contact Author)

University of Hamburg - Institute of Law & Economics ( email )

Johnsallee 35
Hamburg, 20148
Germany
+49-40-428385782 (Phone)
+49-40-428386794 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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