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Egger, Peter, and
Marko Koethenbuerger. 2010. "Government Spending and Legislative Organization: Quasi-experimental Evidence from Germany."
,
2(4): 200-212.
Show Article Details
DOI: 10.1257/app.2.4.200
Abstract:This paper presents empirical evidence of a positive effect of council size on government spending using a dataset of 2,056 municipalities in the German state of Bavaria over a period of 21 years. We apply a regression discontinuity design to avoid an endogeneity bias. In particular, we exploit discontinuities in the legal rule that relate population size of a municipality in order to council size to identify a causal relationship between council size and public spending, and find a robust positive impact of council size on spending. Moreover, we show that municipalities primarily adjust current expenditure in
response to a rise in council size. (JEL D72, H72, R51)
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Authors:
Egger, Peter (ETH Zurich and CESifo)
Koethenbuerger, Marko (U Copenhagen and CESifo)
JEL Classifications:
D72: Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
H72: State and Local Budget and Expenditures
R51: Finance in Urban and Rural Economies
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