How Politics Influence Public Good Provision

Abstract

Ideological stance of politicians might play a role in the efficiency of service provision as well as in the global spending efficiency. This paper examines whether the shares of left-wing, populist, and extremist councillors on all regional councillors are associated with a higher or lower efficiency of education, healthcare, and infrastructure provision as well as with the global spending efficiency of regional governments. To calculate efficiency in each policy domain, we use conditional non-parametric efficiency models and adjust the outputs for the quality of the service provision. Subsequently, we use a composite indicator to obtain the global spending efficiency. On a rich panel dataset of Czech regional governments in the period between 2007 and 2017, we find that the share of left-wing members in the regional councils is negatively associated with the global spending efficiency. This global negative relationship appears to driven by the low performance in health provision, which outweighs a good performance in education. Finally, while we do not find any significant relationship between the share of populist councillors in the councils and the global spending efficiency, we find a significant and negative relationship between this share and the efficiency of education provision.