Electoral reforms and public sector efficiency. Some evidence from Italian municipalities

Abstract: In this paper we test the effect on the technical efficiency of Italian municipalities of Law 81 / 1993, which introduced in Italy a plurality rule for the election of mayors of municipalities with population between 5,000 and 15,000 residents. We estimate technical efficiency both in 1994 (taken as a pre-change year) and 2004 for a sample of 2,336 municipalities, through both FDH and DEA. We then perform on these efficiency scores a difference-in-difference analysis, through fixed effects panel techniques and also with a regression discontinuity design around the size threshold of 15,000 residents. We do not get any evidence that the introduction of a plurality rule in 1993 has resulted in increased efficiency of the concerned municipalities.