Merging county administrations – cross-national evidence of fiscal and political effects

ABSTRACT

While many central governments amalgamate municipalities, mergers of larger county administrations are rare and hardly explored. In this article, we assess both fiscal and political effects of county mergers in two different institutional settings: counties act autonomously as upper-level local governments (Germany), or counties being decentralised branches of the state government (Austria). We apply difference-in-differences estimations to county merger reforms in each country. In both cases, some counties were amalgamated while others remain untouched. Austrian counties (Bezirke) and German counties (Landkreise) widely differ in terms of autonomy and institutions, but our results are strikingly similar. In both cases, we neither find evidence for cost savings nor for staff reductions. Instead, voter turnout consistently decreases in merged counties, and right-wing populists seem to gain additional support. We conclude that political costs clearly outweigh fiscal null benefits of county merger reforms – independent of the underlying institutional setting.     

Testing for Fiscal Illusion in Wisconsin Towns

Fiscal illusion, a theory of the impact of government revenue structures on voter decision-making, has been studied extensively by economists and political scientists; however, empirical verification has been limited. This study builds on Lowery's (1987a) work by examining the relationship between suggested illusionary revenues and measures of electoral stress. Here, electoral stress is measured as constituent contacting—one possible measure of voter influence—for local government officials up for re-election. Using a combination of survey data from over 1,000 Wisconsin town board members, audited fiscal data and U.S. Census data, we were able to test for fiscal illusion. Our findings show that when looking at five revenue types (conditional grants, unconditional grants, property taxes, user fees and charges, and debt service) there is some evidence suggesting officials seeking another term in office will tend to support fees and charges as a revenue structure over other structures. Overall, there is little consistent evidence suggesting that elected officials are manipulating revenue structures for electoral gain. Revenue structures are mostly influenced by social and economic factors, such as median household income, population changes, and per capita property valuation.     

PUBLIC RESPONSIBILITY AND INEQUALITY IN HEALTH INSURANCE COVERAGE: AN EXAMINATION OF AMERICAN STATE HEALTH CARE SYSTEMS

This article examines the effect of the three publicness dimensions on inequality in health insurance coverage across 50 American state‐level health care systems. The analysis validates a Gini‐coefficient measure of Americans' unequal distribution of health insurance coverage across nine income groups and compares public ownership, financing, and control of health care systems across all 50 states from 2002 to 2010. There is a significant and negative relationship between public ownership and inequality in health insurance coverage, although the substantive impact of ownership is relatively small. Both public financing and control substantially reduce inequality in health insurance coverage across income groups. However, both of these must be present in order to be effective at reducing inequality. This article expands our understanding of the link between different institutional arrangements and inequality in health insurance coverage in hybrid health care systems.     

Health,Poverty and Service Use Among Older West Indian Women in Greater Hartford

SUMMARY

This study brings to light the phenomenon of aging in the West Indian migrant community in the United States. It presents the results of a cross-sectional exploratory survey of 107 community-dwelling West Indian women aged 55 years and over living in the Greater Hartford region of Connecticut. The data analysis reveals positive self-reports of health and few limiting or disabling conditions. However, there is substantial income inequality, a negative relationship between age group and income and limited use of services among those women most likely to require them. The findings suggest that some of the qualities which contributed to West Indians becoming the “Black success model” in the U.S. may be counterproductive for successful aging. A community-based strategy for addressing these issues is outlined.     

Who votes for mayor? Evidence from midsized American cities

Who, or what, governs the mosaic of the almost 39,000 general purpose local governments across the United States? While the determinants of voter turnout in both national and sub-national elections have been well studied, there is a dearth of empirical literature examining voter turnout at the municipal level. Utilizing an original dataset of 356 midsized US cities drawn from the Midwest, South, and Northeast regions, this paper ponders the drivers of mayoral turnout, and asks if electoral timing, competitiveness, or characteristics of the electorate best predict turnout. Sequenced hierarchical linear models and OLS regressions are employed to control for sub-national effects, and model results indicate that election timing greatly dictate who governs midsized American cities. While local competitiveness and characteristics of the electorate also matter, their explanatory value is greatly over-shadowed by timing.     

Population and income: Is there a puzzle?

Abstract

This note presents wide evidence on the relationship between population and income for 125 countries for which data was available for the period 1950–2000. The main result is that there is a weak but negative relationship between population growth and per capita GDP, as income increases population expands at a slower rate. This relationship appears to be stronger for African countries and for Asian countries before 1970.     

Voter turnout and municipal amalgamations—evidence from Denmark

ABSTRACT

The study utilizes evidence from the Danish 2007 municipal reform to inquire into the relationship between municipal amalgamations and voter turnout, that is, the classical discussion on size and democracy. The Danish municipal reform is particularly suited for investigating the relationship as a large number of units were merged due to reasons thought to be unrelated with the democratic performance while others were left unchanged. This allows us to investigate the relationship in a quasi-experimental setup. The study finds some evidence of a short-term positive effect on turnout and only limited evidence of a medium- to long-term negative effect when comparing amalgamated and non-amalgamated municipalities. However, stronger indications of negative effects on turnout are found when considering the intensity of the amalgamations.     

The Income Lever and the Allocation of Aid

Abstract

The article develops a concept and a measure of the monetary capacity of a country to reduce its own poverty and shows how these tools can be used to guide budget allocations or the allocation of aid. The authors call this concept the income lever. Making use of tax and distributive theory, the article shows how different redistributive criteria correspond to the different normative criteria of the income lever. It then constructs various income lever indexes based on these criteria and uses such indexes to rank countries according to their own capacity to reduce poverty.     

The Flypaper Effect Revisited: Intergovernmental Grants and Local Governance

Abstract

Local governance arrangements shape the incentives of local actors, which may in turn influence fiscal choices. By emphasizing the role of local government institutions in local fiscal choices, we seek to bridge between median voter and Leviathan models prevalent in the literature. We then offer some preliminary evidence to support this explanation by empirically testing several propositions regarding the flypaper effect in intergovernmental grants. One limitation of the median voter model is that the model does not consider political institutions and their influences on government expenditures. In this study, we attempt to capture the influence of political dynamics in determining public expenditures by considering institutional variables. Test results show that the political institutional variables could be one of the explanation variables for the flypaper effect.     

Inequality,democracy and taxation: Lessons from the post-communist transition

Using data for the period 1989 – 2002, we examine the determinants of income inequality in post-communist economies. We find a strong positive association between equality and tax collection but note that this relationship is significantly stronger under authoritarian regimes than under democracies. We also discover that countries introducing sustainable democratic institutions early are characterised by lower inequality. We also confirm that education fosters equality and find that larger countries are prone to higher levels of inequality.     

Is Corruption Really Bad for Inequality? Evidence from Latin America

This article presents new evidence on the relationship between corruption and income inequality. Using a panel data methodology, we find that lower corruption is associated with higher income inequality in Latin America. This result is in contrast to other empirical studies but it makes sense in Latin America for a number of reasons. The finding of an inverse relationship between inequality and corruption suggests that institutional reform policies by themselves may be misguided.     

Social Inequality and Assessments of Democracy and the Market: Evidence from Central and Eastern Europe

Considerable comparative scholarly attention has been paid to various aspects of mass support for democracy and the market. However, despite strong theoretical suggestions of a linkage, little is known about the impact of social inequality on this support. We address this issue using evidence from mass surveys undertaken in 12 post-communist states in 2007, supplemented by country-level data about economic and political performance. Specifically, we investigate whether social inequality generates negative perceptions that democracy and the market will lead to social conflict and if it increases support for anti-democratic forms of governance. Notably, we find little link between citizens’ expectations of social conflict and national-level indices of income inequality. However, we do find a link between perceptions of the extent of social inequality and expectations of market-generated—but not democracy-generated—conflict. Underscoring these positive and negative findings, perceptions of social inequality are also clearly consequential for support for ‘strong-hand’ economic government but not for anti-democratic leadership.     

Political Competition and Local Social Spending: Evidence from Brazil

Electoral theories of democracy imply electoral competition insures accountability. Using data on local elections, socioeconomic factors, and municipal budgets from more than 5,000 municipalities in Brazil for the years 1996, 2000, and 2004, we find that municipalities with more competitive elections allocate less to social spending compared to municipalities with little political competition. We argue that previous theory on political competition and public goods obscures the critical role that financial resources play in shaping the dynamics of social spending and political competition. Municipalities with small budgets lack the resources necessary to engineer convincing electoral victories. Where resources are negligible, voter turnout is low, and incumbents rarely win reelection. Incumbent parties in municipalities with large financial resources win big. Armed with adequate resources, incumbent parties mobilize voters and win by large margins. This new argument and evidence reconcile contradictory findings in the existing literature on competition and public goods.     

Intermunicipal cooperation,public spending and service levels

ABSTRACT

Local governments can increase size in particular policy fields through cooperation with other local governments. This is often thought to improve efficiency, but there is little empirical evidence supporting this hypothesis. We study the case of the Netherlands, which has been a veritable laboratory of intermunicipal cooperation (IMC), using panel data for 2005–2013. We find no evidence that IMC reduces total spending of the average municipality. Indeed, IMC seems to increase spending in small and large municipalities, leaving spending in mid-sized municipalities unaffected. In one specific field, tax collection, spending may be reduced through IMC. Spending in this field is low, which may explain why total spending is unaffected. Instead of lowering spending, municipalities may have used possible cost savings as a result of IMC to improve public service levels. We do not find evidence substantiating this hypothesis, however.     

For Health,Strength, and Daily Food: The Dual Impact of Remittances and Public Health Expenditure on Household Health Spending and Child Health Outcomes

Abstract

Child and infant mortality in developing countries decreased 33.5 per cent and 30.9 per cent, respectively, during 1995–2009, while remittances and public health spending more than doubled. I examine how remittances and government health spending improve these child health outcomes. Neither government health spending nor remittances causally affect household health spending. Public health spending has an insignificant negative impact on mortality. The increase in remittances causally accounts for 32 per cent and 37 per cent of the decline in child and infant mortality, respectively. Remittances reduce mortality through improved living standards from the relaxation of households’ budget constraints.     

Estimation of Opportunity Inequality in Brazil using Nonparametric Local Logistic Regression

Abstract

This article measured opportunity inequality in Brazil by combining a series of theoretical and empirical tools. The database was built using a two-sample instrumental variable (TSIV), developed by Angrist and Krueger. After that, the axiomatic approach put forward by O'Neill et al. was used, in which the estimation of children's income distribution function is conditional on their fathers' wages. The inference process was based on nonparametric local logistic regression. The results indicate that Brazil has a high level of opportunity inequality. In other words, in the context of intergenerational mobility, those whose fathers belong to lower income strata have to expend greater effort in order to attain a certain income level.     

Revitalizing Local Government Performance Management: Further Dissecting the Role of Socioeconomic Status and Social Mobilization Policy

ABSTRACT

This article examines how socio-economic status and social mobilisation are linked to local government performance management in Nepal. As part of local government reform, Nepal adopted a social mobilisation policy in selected local governments to empower communities for their effective participation. Our results show that socio-economic status and social mobilisation have a significant relationship with performance management. Female literacy, for example, is strongly and significantly associated with performance management, while area has a significant positive relationship but population has only a weak positive relationship. In contrast, poverty has a significant negative correlation. More importantly, mobilisation has a significant, though modest, positive association with performance management particularly in participatory planning and budgeting, fiscal discipline, and administrative management. This indicates that improving the socio-economic status of citizens and their mobilisation for empowered collective action can be one important strategy to improve the performance capacity of local government.     

Inequality and Economic Growth: The Empirical Relationship Reconsidered in the Light of Comparable Data

Almost all the recent empirical work on the relationship between income inequality and economic growth has used inequality data that are not consistently measured. This article argues that this is inappropriate and shows that the significant negative correlation often found between income inequality and growth across countries may not be robust when income inequality is measured in a consistent manner. However, evidence is found of a significant negative correlation between consistently measured inequality of expenditure data and economic growth for a sample of developing countries.     

United Russia’s Primaries and the Strength of Political Machines in the Regions of Russia: Evidence from the 2016 Duma Elections

Abstract

The primary elections of the United Russia party serve as a tool for party organisation and voter mobilisation. In this study, we employ United Russia’s capacity to mobilise voter turnout in the 2016 primary elections as an indirect indicator of the strength of party-controlled regional political machines. Our analysis of the results of the 2016 Duma elections in 83 regions of Russia demonstrates that voter turnout in the spring 2016 party primaries of United Russia to a significant extent explains cross-regional variation in party success.     

Bureaucratic Corruption and Income: Evidence from the Land Sector in Bangladesh

We examine, for the first time, the effects of corruption on income using household survey data from a developing country. Estimating the effects of corruption on income is challenging because of the simultaneous relationship between the two variables. We use a two-step instrumental variable approach to identify the effects of corruption on income. We find that after adjusting for simultaneity bias the act of bribery reduces income and that higher bribes have a negative effect on income. Taken together, our results provide a possible explanation why a vicious cycle between corruption and income inequality does not exist in the land sector in Bangladesh.