Zur politischen Ökonomie kommunaler Unternehmen

Do misaligned incentives arise between municipal enterprises, municipal politics and citizens? This study applies approaches from public choice theory to information problems and incentive inefficiencies in municipal enterprises. Using multivariate regression analyses, the author empirically examines the influence of municipal policy on the investment behaviour of the enterprises in question: 8,685 companies from 3,237 municipalities taken from all 13 German federal states during the period 2002–2014. The study’s key finding is that the fragmentation of interests in municipal councils has a negative influence on the enterprises’ investments per capita, which potentially indicates investment blockades.