Abstract

http://ssrn.com/abstract=1374166
 
 

Citations (5)



 


 



Does Direct Democracy Reduce the Size of Government? New Evidence from Historical Data, 1890-2000


Patricia Funk


Universitat Pompeu Fabra

December 15, 2007


Abstract:     
Using historical data for all Swiss cantons from 1890 to 2000, we estimate the causal effect of direct democracy on government spending. The main innovation in this paper is that we use fixed effects to control for unobserved heterogeneity and instrumental variables to address the potential endogeneity of institutions. We find that the budget referendum and lower costs to launch a voter initiative are effective tools in reducing canton level spending. However, we find no evidence that the budget referendum results in more decentralized government or a larger local government. Our instrumental variable estimates suggest that a mandatory budget referendum reduces the size of canton spending between 13 and 19 percent. A 1 percent lower signature requirement for the initiative reduces canton spending by up to 2 percent.

Number of Pages in PDF File: 47

Keywords: Direct Democracy, Fiscal Policy, Switzerland

JEL Classification: H11, N43

working papers series





Download This Paper

Date posted: April 7, 2009  

Suggested Citation

Funk, Patricia, Does Direct Democracy Reduce the Size of Government? New Evidence from Historical Data, 1890-2000 (December 15, 2007). Available at SSRN: http://ssrn.com/abstract=1374166 or http://dx.doi.org/10.2139/ssrn.1374166

Contact Information

Patricia Funk (Contact Author)
Universitat Pompeu Fabra ( email )
Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain
+34 94 5421942 (Phone)
+34 93 5421746 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 356
Downloads: 39
Citations:  5
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.312 seconds