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- Bruns, Benjamin, et al.
(author)
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Finding Your Right (or Left) Partner to Merge
- 2015
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In: SSRN Electronic Journal. - Berlin, Germany : German Institute for Economic Research - DIW Berlin. - 1556-5068.
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Other publication (other academic/artistic)abstract
- We study political determinants of municipality amalgamations during a boundary reform in the German state of Brandenburg, which reduced the number of municipalities from 1,489 to 421. The analysis is conducted using data on the political decision makers as well as fiscal and socio-economic variables for the municipalities. We ask whether party representation in the town council influences the merger decision. To identify the effect, we follow a dual approach and make use of different stages in the reform process. First, municipalities were initially free to choose partners. In a later phase of the reform the state legislature forced municipalities to amalgamate. We can, thus, compare voluntary to forced units. Second, we simulate potential mergers from the map of municipalities and compare voluntary mergers to those simulated units. Both approaches show that political representation matters significantly during the voluntary stage of the merger reform
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| 2. |
- Freier, Ronny, et al.
(author)
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Do parties matter? Estimating the effect of political power in multi-party systems
- 2015
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In: European Economic Review. - : Elsevier BV. - 0014-2921 .- 1873-572X. ; 80, s. 310-328
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Journal article (peer-reviewed)abstract
- When there are more than two parties, policy outcomes are typically the result of a bargaining process. We investigate whether changes in political power for various parties have an effect on tax policies. We use an instrumental variable approach where close elections provide the exogenous variation in our variable of interest: voting power. In order to isolate close elections in a proportional election system, we develop a new simulation algorithm. Using data from German municipalities in the state of Bavaria, our estimation results suggest that political power does matter for policies. Somewhat surprisingly, the center-left party SPD is found to lower all three locally controlled taxes, whereas The Greens increase both property taxes considerably. These results remain robust across a range of specifications. Our partisan effect for the SPD is also confirmed by a simple regression discontinuity estimation using mayoral elections.
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