The Political Economy of Direct Democracy: A Survey
University of St. Gallen Dept. of Economics Discussion Paper No. 9807
39 Pages Posted: 14 Jul 1998
Date Written: June 1998
Are political outcomes in democratic systems with referenda and initiatives stronger related to the preferences of the individual citizens than in purely representative systems? After present-ing the theoretical arguments related to the functioning and efficiency of initiatives and refer-enda, this paper surveys the results of empirical studies about the economic impact of direct democratic rules, especially on public fiscal policy, the efficiency of publicly provided goods, and gross domestic income. We also consider papers about the impact of tax payer revolts and about single referenda on different governmental levels. Over all, it is shown that the individ-ual preferences have a stronger impact in a direct democracy than in a purely representative system.
JEL Classification: H10
Suggested Citation: Suggested Citation