Public-Sector Efficiency and Political Culture

The cost-effective public provision of high-quality goods and services is crucial for long-term growth. We study the determinants of public-sector efficiency (PSE) and in particular the role of citizens' political values. Indeed, we argue that citizens' willingness to monitor public affairs is necessary if policymakers are to be held accountable for what they do and deterred from wasting public resources. Contrary to other papers, our empirical analysis exploits within-country variation, thereby reducing the risk of omitted-variable bias and implicitly controlling for differences in formal institutions. First, we compute PSE measures for several public services (education, civil justice, health care, child care, and waste disposal) for the 103 Italian provinces; then we show that a higher degree of political engagement increases PSE. This remains true even after controlling for the possible endogeneity of political values. In our analysis, values specifically related to the political sphere are kept distinct from generically prosocial values. Our results suggest that the latter have no independent effect on PSE.