Applications to German Local Governments

Abstract

In this chapter some of the methods derived in chapter 2 will be employed to investigate different aspects of the (cost) efficiency of local governments in Germany. More specifically, section 4.3 focuses on the cost efficiency of German municipalities and relates the results to the negative demographic change which will take place within the next decades in Germany. In section 4.4 and 4.5, in contrast, the relationship between intergovernmental grants and cost efficiency, on the one hand, as well as voter involvement (in political processes), fiscal autonomy and cost efficiency, on the other hand, is analysed. In both sections the focus lies again on German municipalities. Finally, section 4.6 focuses on the main drivers of efficiency of one specific area of public good provision: the construction and maintenance of county roads in Germany.