|
EconStor >
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim >
ZEW Discussion Papers >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/24747
|
| | |
| Title: | | The Impact of Intergovernmental Grants on Cost Efficiency: Theory and Evidence from German Municipalities  |
| Authors: | | Kalb, Alexander |
| Issue Date: | | 2008 |
| Series/Report no.: | | ZEW Discussion Papers 08-051 |
| Abstract: | | In this paper we use a simple bureaucracy model of fiscal illusion to analyze the impact of intergovernmental grants on the cost efficiency of local jurisdictions. We find that a higher degree of redistribution within a system of fiscal equalization or an increase in the amount of grants received by a local jurisdiction leads to an extension of organizational slack or X-inefficiency in that jurisdiction. This theoretical prediction is tested by conducting an empirical analysis using a broad panel of German municipalities. The results of the empirical analysis are consistent with the theoretical findings and therefore support the existence of a negative incentive effect of intergovernmental grants on local authorities' cost efficiency. |
| Subjects: | | Cost efficiency Fiscal equalisation Intergovernmental grants Bureaucracy Stochastic frontier analysis German municipalities |
| JEL: | | H11 H77 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des ZEW ZEW Discussion Papers
|
| Files in This Item:
| |
| File |
Description |
Size | Format |
| dp08051.pdf | | 328.47 kB | Adobe PDF |
|
| No. of Downloads:
| |
| last Month |
last 3 Month |
total |
|
|
|
|
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/24747
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|