Public employees as swing voters: Empirical evidence on opposition to public sector reform.

Abstract Public sector reform in Europe is implemented in an environment of political conflict and strong opposition from public employees and their trade unions. The broad understanding is that reform offers economic gains for society at large, but represents a threat to the interests of public employees. Norwegian data allow for an analysis of the influence of the public employees and other members of the 'welfare coalition' financed by the government. Three types of evidence are presented: First, interview data show that public employees prefer less reform than the rest of the population. Second, interview data show that the voting behavior of the public employees is more sensitive to reform than other voters. In particular public employees express that they are likely to change party if the party proposes reform. Third, an analysis of reform variation among local governments shows that the number of public employees in a municipality negatively influences the probability of reform. Our interpretation is that politicians are influenced by the size of this voting group because of it's sensitivity to the reform issue. The combination of interview data and reform analysis offers new evidence in support of the swing voter model

Grey power and public budgets: Family altruism helps children, but not the elderly

The literature on intergenerational conflict and public budgets has shown that the demands of the elderly may crowd out educational spending. We extend this literature to take into account altruism within the family where individuals care about the welfare of family members. The conflicting claims to the public budget will reflect the political strength of age groups, but may also be influenced by whether middle-aged have children or elderly parents in the community. We investigate the role of family altruism using both survey data and demographic and local government budget data in Norway from 1992 to 2004. Family altruism matters for local government spending on primary education, but does not affect spending on old-age care and health services. The old must take care of their own interests themselves.Generational conflict Family altruism Elderly and educational spending Intergenerational linkages Local government services

Local government consolidations: The impact of political transaction costs

Local government in Norway comprises a large number of small municipalities. Cost efficiency can be improved by consolidating local authorities, and central government has designed a framework to stimulate voluntary mergers. Existing theories suggest that political transaction costs will impede consolidations. (1) Generous grants compensate diseconomies of scale. Central government has promised small municipalities that grant levels will be maintained, but policy promises may not be credible. (2) Property rights to local revenues are nullified when consolidations have been implemented. High-revenue municipalities will therefore go against merger with a poorer neighbor. (3) A consolidated local council may be composed of different political parties, and it may therefore pursue other policies than an existing council. Expected changes in party strength can lead municipalities to oppose a proposed consolidation. (4) Senior politicians are less likely to support mergers, particularly if they come from small polities. We offer an explicit test of these propositions based on data for Norwegian local government. Elected politicians and administrative leaders are more interested in consolidating when efficiency gains are large. Local revenue disparities and to some extent dissimilar party preferences are significant impediments to voluntary mergers. Additionally, smaller municipalities are often prepared to sacrifice some efficiency gain to remain independent polities. Copyright Springer Science + Business Media, Inc. 2006