A Panel Data Analysis of the Impacts of Institutional Differences on Local Governments’ Budgetary Decisions
Eom, Tae Ho
Date of Issue2015
School of Humanities and Social Sciences
This study provides empirical evidence on how institutional differences influence school budget decisions by using panel data from 178 K-12 New Jersey school districts for the period 1996 to 2007. The findings obtained by the Newey-West model, correcting heteroskedasticity and serial correlation, support our hypothesis that school districts with elected school boards (Type II districts) are more likely to be effective at lowering school spending than ones with appointed school boards (Type I districts). Viewing school systems through the lens of new institutional economics, this study argues that institutional differences in governance are critical in leading to differences in budgetary decisions by affecting incentive structures faced by public officials, along with transaction costs and agency costs.
Administration and democracy
International Review of Administrative Sciences
© 2015 The Author. This is the author created version of a work that has been peer reviewed and accepted for publication in International Review of Administrative Sciences, published by SAGE on behalf of the Author. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [http://dx.doi.org/10.1177/0020852314564306].