Government spending and legislative organization: Quasi-experimental evidence from Germany
Research output: Contribution to journal › Journal article › Research › peer-review
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.
Original language | English |
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Journal | American Economic Journal: Applied Economics |
Volume | 2 |
Issue number | 4 |
Pages (from-to) | 200-212 |
Number of pages | 13 |
ISSN | 1945-7782 |
DOIs | |
Publication status | Published - 2010 |
- Faculty of Social Sciences
Research areas
ID: 17523310