Outcome, Process & Power in Direct Democracy New Econometric Results

Abstract

Based on survey data for Switzerland, new empirical findings on direct democracy are presented. In the first part, we show that, on average, public employees receive lower financial compensation under more direct democratic institutions. However, top bureaucrats are more constrained in direct democracies and have to be compensated by higher wages for that loss of power. In the second part, we demonstrate that reported subjective well-being of the population is much higher in jurisdictions with stronger direct democratic rights. This is not only the case because people value political outcomes higher but they derive utility from the politcal process itself.

Keywords: Direct democracy, power, compensating wage differentials, satisfaction with life, process utility

JEL Classification: H73, I31, J45, J32