Fiscal Effects of Reforming Local Constitutions — Recent German Experiences

25 Pages Posted: 24 Jun 2010

See all articles by Lorenz Blume

Lorenz Blume

Phillips University Marburg

Thomas Döring

University of Kassel

Stefan Voigt

University of Hamburg - Institute of Law & Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: June 23, 2010

Abstract

Most German states amended their local constitutions during the 1990s and now allow for the direct election of mayors, initiatives and referendums, and vote aggregation, as well as vote splitting. We ask whether these reforms had any effects on local fiscal policies. We show that the direct election of mayors led to lower government spending, whereas the introduction of direct democratic elements led to higher expenditures. The empirical results concerning direct democracy are substantially different from findings in relation to both Switzerland and the United States. We argue that this difference may be due to a lack of fiscal referendums in Germany.

Keywords: Local Constitutions, Direct Democracy, Local Referendums, Local Electoral System

JEL Classification: H1, K0, R5

Suggested Citation

Blume, Lorenz and Döring, Thomas and Voigt, Stefan, Fiscal Effects of Reforming Local Constitutions — Recent German Experiences (June 23, 2010). Available at SSRN: https://ssrn.com/abstract=1629142 or http://dx.doi.org/10.2139/ssrn.1629142

Lorenz Blume

Phillips University Marburg ( email )

Am Plan 2
Marburg, D-35037
Germany

Thomas Döring

University of Kassel ( email )

D-34109 Kassel, Hessen
Germany

Stefan Voigt (Contact Author)

University of Hamburg - Institute of Law & Economics ( email )

Johnsallee 35
Hamburg, 20148
Germany
+49-40-428385782 (Phone)
+49-40-428386794 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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