Competition in the political arena and local government performance |
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Authors: | John Ashworth Bruno Heyndels Fanny Wille |
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Affiliation: | 1. Department of Economics and Finance, University of Durham, Durham DH1 3HY, England;2. Department of Applied Economics, Vrije Universiteit Brussel, B-1050 Brussel, Belgium |
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Abstract: | Competition reduces rent extraction in private-sector firms. In this article, we empirically assess whether it similarly disciplines politicians by evaluating local-level governments’ performance in Flanders. The results indicate that electoral competition – measured via the number of parties competing in elections – significantly positively affects the productive efficiency of municipal policy. Intertemporal competition – measured as the volatility of election outcomes over time – has a similar, but weaker, positive effect. These beneficial effects are mitigated by the fact that competition may lead to more fragmented governments, which is shown to work against their productive efficiency. Overall, though, the beneficial effects outweigh the unfavourable ones in our sample. |
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Keywords: | competition government performance productive efficiency rent extraction |
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