Government Spending and Legislative Organization: Quasi-experimental evidence from Germany

Publikation: Working paperForskning

Dokumenter

  • Wp-10-09

    Forlagets udgivne version, 258 KB, PDF-dokument

  • Peter Egger
  • Marko Köthenbürger
This paper presents empirical evidence of a positive effect of council size on government spending using a data set 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 relates population size of a municipality 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.
OriginalsprogEngelsk
UdgiverDepartment of Economics, University of Copenhagen
Antal sider14
StatusUdgivet - 2010

Bibliografisk note

JEL classification: D7, H7, C2

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