American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Government Spending and Legislative Organization: Quasi-experimental Evidence from Germany
American Economic Journal: Applied Economics
vol. 2,
no. 4, October 2010
(pp. 200–212)
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)Citation
Egger, Peter, and Marko Koethenbuerger. 2010. "Government Spending and Legislative Organization: Quasi-experimental Evidence from Germany." American Economic Journal: Applied Economics, 2 (4): 200–212. DOI: 10.1257/app.2.4.200Additional Materials
JEL Classification
- 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
There are no comments for this article.
Login to Comment