Yardstick competition and public sector innovation

  • Johannes Rincke


The paper addresses the incentives of the public sector to implement new technologies in public service provision. The focus is on the role of local governments under decentralization. Exploiting variation in the level of innovation in a large sample of US school districts, the impact of yardstick competition on the choice of public sector technologies is identified. It is shown that the impact of other districts’ innovation activity on a district’s innovation score is much stronger in communities where incumbents face a high risk of being elected out of office. This finding suggests that under decentralization, yardstick competition is an important force shaping the decisions of local governments to adopt new technologies.


Public sector innovation Yardstick competition School districts Public schools 

JEL Classification

D78 D82 H77 


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Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of MunichMunichGermany

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