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Rechnungshöfe spielen eine zentrale Rolle in der Demokratie. Im Verbund mit Informations- und Offenlegungspflichten bilden sie das Rückgrat einer transparenten Staatsführung. Um die Aufsichtsrolle wahrzunehmen, ist eine institutionelle Verankerung der Unab hängigkeit notwendig. Neben der formal en- juristischen Festlegung der Unabhängigkeit braucht es von der Regierung unabhängige Wahl - und Amtsenthebungs verfahren. Auch Amtszeitbeschränkungen und Mindestanforderungen an die Fachkompetenz können fruchtbar wirken. Typischerweise nehmen Rechnungshöfe die ex post Kontrolle der Haushaltführung und Wirtschaftlichkeit vor. Weiterentwicklungen der traditionellen Finanzkontrolle zeigen, dass ein erweitertes Mandat zur Durchführung von ex ante Evaluationen des Budgets und von Investitionsprojekten bereits in der Beschlussphase wichtige Information en liefern und zur nachhaltigen Entwicklung der öffentlichen Finanzen beitragen können.

SummaryCorporate auditors review and evaluate financial statements. Audit quality depends on auditor expertise and independence. To enhance auditor independence the selection process and auditor rotation requirements have been debated intensively. The available empirical evidence is not conclusive and suffers from serious endogeneity problems. I propose learning from the public sector where auditors play a similar role and present empirical evidence on the impact of auditor expertise, term length and rotation requirements on government performance at the US state level. I find evidence indicating that greater auditor expertise and rotation requirements have a positive effect on state credit ratings.

Improving transparency and enabling the principal to hold its agents accountable is a major issue in any principal agent relationship. This paper focuses on the role of public auditors in this task and presents evidence on the impact of auditor term length and term limits on government performance measured by state credit ratings at the US State level. I find no clear evidence for the influence of auditor term length, but strong evidence for a positive and significant influence of term limits on state credit ratings. Auditors who face a binding term limit are associated with higher credit ratings. Adapted from the source document.

The ability of voters to use the available electoral instruments is crucial for the functioning of democracies. The paper shows that voters consider the institutional environment when making electoral decisions. Voters recognize that executives who face binding term limits (i.e., lame ducks) have incentives to deviate from the preferences of voters because these politicians are not subject to reelection restrictions. This weakened accountability can be counterbalanced by an alternative mechanism known as divided government. By dividing government control between the executive and legislative branches, voters can force a lame duck to compromise on policies with an opposing legislature. Using a panel data analysis of the US states from 1975 to 2000, it is shown that the probability of divided government is 10-15 percent higher when governors are lame ducks. This effect remains robust and significant even after controlling for many relevant covariates. This result provides evidence of the considerable capacity of voters to process information and use alternative electoral instruments to control an otherwise unaccountable executive.

Public Auditors are fundamental institutions to supervise government agents. Without accurate information principals would find it hard to make adequate decisions. Since agents face strong incentives to misreport, competent audits of financial information are crucial. This paper is the first attempt to study the relationship between auditor expertise and fiscal performance. More competent auditors are more effective supervisors; they reduce the leeway of agents to misreport and improve fiscal outcomes. The empirical results support this hypothesis. I find that States requiring the auditor to hold a professional degree feature significantly lower debt and expenditures as well as higher credit ratings.

Improving transparency and enabling the principal to hold its agents accountable is a major issue in any principal agent relationship. This paper focuses on the role of public auditors in this task and presents evidence on the impact of auditor term length and term limits on government performance at the US State level. While the empirical results for the influence of term length are ambiguous, I find strong evidence for a positive and significant influence of term limits on state credit ratings. Auditors who face a binding term limit seem to be more effective monitors, which improves credit ratings.

Public auditors should reduce agency problems and improve transparency. We address the question of whether auditors should be elected by the citizens or appointed by either the legislature or the executive, and explore the influence of conducting performance audits. We construct a unique dataset at the US State level capturing differences in the institutional design of state auditing institutions. We estimate the influence of auditor characteristics on different outcome variables reflecting government performance and implement an alternative identification strategy relying on citizens' electoral decisions. We examine whether citizens use divided government - a costly mechanism to control the government - as a substitute, when other effective, but less costly mechanisms are not available. Even if the empirical results are sometimes difficult to interpret, we generally find that (1) performance audits tend to be beneficial and (2) elected auditors with a strong mandate to conduct performance audits seem to outperform other institutional arrangements.

Corporate auditors review and evaluate financial statements. To enhance independence the selection process and mandatory auditor rotation requirements have been debated intensively. The available empirical evidence is not conclusive and suffers from serious endogeneity problems. We propose learning from the public sector in which auditors play a similar role and present empirical evidence on the impact of auditor term length and rotation requirements on government performance at the US State level. We find evidence indicating that relatively short as well as extended auditor terms have a negative, and rotation requirements have a positive effect on state credit ratings.