Date of Award

8-2017

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Committee Member

Dr. Howard Bodenhorn, Committee Chair

Committee Member

Dr. Patrick Warren

Committee Member

Dr. Babur De Los Santos

Committee Member

Dr. Raymond Sauer

Abstract

Recent research tests and finds support for the hypothesis that an increase in the number of elected representatives in local governments can reduce public expenditures by improving the oversight of the mayor by the council. This result suggests that a system of checks-and-balances is in place at the lowest level of governance in established democracies and is consistent with theories of the role of division-of-powers in improving government accountability. Given the relevance of this result for our understanding of political institutions, this dissertation presents three essays that: 1) test this hypothesis using different samples and alternative measures of government performance and 2) revisit the evidence from the existent literature. The first essay tests the hypothesis by implementing a Regression Discontinuity (RD) design using data from a large panel of local governments in Colombia, South America. I find that additional representatives decrease government expenditures on average; however, there is no evidence that this increase affects the oversight on the mayor. The results persist after accounting for the number of parties with elected representatives, indicating that the estimates are not driven by changes in the party composition. There is also no evidence that the reduction in municipal expenditures affects the provision of services such as potable water, student enrollment in elementary and high school education, and provision of health care to the low income population. Given the findings from the panel of municipal governments in Colombia, the second essay revisits the two empirical studies that report support for the hypothesis. A common feature of both studies is that they present their estimates of the effect of council size as coming from a RD specification. However, after examining the estimated equations, I show that they are inconsistent with a RD design because they do not incorporate information about the data generating process (i.e., discontinuities in the treatment assigning variable). The data from both studies is then used to estimate the effect of changes in the number of representatives using an appropriate RD specification. I find that the parameter estimates from the appropriate RD specification fail to reject the null hypothesis that a change in the number of representatives does not affect the oversight of the manager/major by the council. The last essay provides an additional test for the hypothesis that an increase in the number representatives can increase the oversight of the executive by the council using a panel of municipal governments from Costa Rica. Although this panel is smaller than the one from Colombia, it better represents local governments in many developing countries where municipalities have a limited number of responsibilities with most services being provided through the central government. Using a RD design, I find no evidence that an increase in the number representatives has an impact on fiscal efforts or the allocation of municipal expenses. This is in spite of the fact that changes in the number of representatives lead to an increase in the number of parties in local councils.

Share

COinS