Direct Democracy and Local Government Efficiency

27 Pages Posted: 13 Mar 2014

See all articles by Zareh Asatryan

Zareh Asatryan

ZEW – Leibniz Centre for European Economic Research; University of Freiburg

K. De Witte

University of Leuven (KUL); Maastricht University

Date Written: February 15, 2014

Abstract

This paper studies the role of direct democracy in ensuring efficient and cost effective provision of goods and services in the public sector. The sample consists of the population of municipalities in the German State of Bavaria, where in the mid-1990s considerable direct democratic reforms granted citizens with wide opportunities to directly participate in local affairs through binding initiatives. Using information on the municipal resources and the municipal provision of public goods, and applying a fully non-parametric approach to estimate local government overall efficiency, the analysis shows that more direct democratic activity is associated with higher government efficiency. This result suggests that more inclusive governance through direct decision-making mechanisms may induce more accountable and less inefficient governments.

Keywords: Direct democracy, Public sector efficiency, Conditional efficiency

JEL Classification: C14, D7, H7

Suggested Citation

Asatryan, Zareh and De Witte, Kristof, Direct Democracy and Local Government Efficiency (February 15, 2014). ZEW - Centre for European Economic Research Discussion Paper No. 14-017, Available at SSRN: https://ssrn.com/abstract=2407954 or http://dx.doi.org/10.2139/ssrn.2407954

Zareh Asatryan (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

L7
1
Mannheim, 68161
Germany

University of Freiburg ( email )

Albert-Ludwigs-Universität Freiburg, Wirtscha.inf.
Kollegiengebäude II, Platz der Alten Synagoge
Freiburg im Breisgau, 79098
Germany

Kristof De Witte

University of Leuven (KUL) ( email )

Naamsestraat 69
Leuven, Vlaams Brabant B-3000
Belgium

HOME PAGE: http://www.feb.kuleuven.be

Maastricht University ( email )

Boschstraat 24
Maastricht, Vlaams-Brabant 6211 AX
Netherlands
003216326656 (Phone)

HOME PAGE: http://www.feb.kuleuven.be

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