Voters' Information, Corruption, and the Efficiency of Local Public Services

Graziano Abrate (), Federico Boffa, Fabrizio Erbetta () and Davide Vannoni
Additional contact information
Graziano Abrate: Department of Economics and Business, University of Piemonte Orientale, Italy
Fabrizio Erbetta: Department of Economics and Business, University of Piemonte Orientale, Italy

No 35, Working papers from Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino

Abstract: This paper explores the link between voters’ information, corruption and efficiency in the context of a career concern model where politically connected local monopolies are in charge of the provision of a local public service. We find that both a corrupt environment and a low level of voters’ information on managerial actions induce managers to reduce effort levels, thereby contributing to drive down efficiency. We test our predictions using data on solid waste management services provided by a large sample of Italian municipalities. We estimate a stochastic cost frontier model that provides robust evidence that services provided in more corrupt regions and in regions with low voters’ information are substantially less cost efficient. We show that the negative impact of a corrupt environment is weaker for municipalities ruled by left-wing parties, while the positive impact of voters’ information is larger if the waste collection service is managed by limited liability companies. We finally quantify potential cost savings associated to operating in a less corrupt environment and in one in which voters are more informed through a simulation on six major Italian cities. The magnitude of the figures suggests that effective anti-corruption measures, and/or carefully designed incentives for citizens to acquire information, can generate significant economic benefits.

Keywords: Corruption; Voters’ Information; Efficiency; Solid Waste. (search for similar items in EconPapers)
JEL-codes: D24 D72 D73 L25 Q53 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2016-03
New Economics Papers: this item is included in nep-cdm, nep-eff and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.bemservizi.unito.it/repec/tur/wpapnw/m35.pdf First version, 2016 (application/pdf)

Related works:
Journal Article: Voters’ Information, Corruption, and the Efficiency of Local Public Services (2018)
Working Paper: Voters' Information, Corruption, and the Efficiency of Local Public Services (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:tur:wpapnw:035

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