Government Spending and Legislative Organization: Quasi-Experimental Evidence from Germany

• 成果类型: Article
• 署名作者: Egger, Peter; Koethenbuerger, Marko
• 署名单位: Swiss Federal Institutes of Technology Domain; ETH Zurich; University of Copenhagen
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.2.4.200
• 发表日期: 2010
• 页码: 200-212
• 关键词: parties matter; POLITICS

摘要

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.