Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82097
Authors: 
Egger, Peter
Koethenbuerger, Marko
Year of Publication: 
2010
Series/Report no.: 
EPRU Working Paper Series 2010-09
Abstract: 
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.
Subjects: 
Legislative organization
Regression-discontinuity design
Government spending
Mayor-council system
JEL: 
D7
H7
C2
Document Type: 
Working Paper

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