The Effect of Direct Democracy on Income Redistribution: Evidence for Switzerland

24 Pages Posted: 15 Sep 2010

See all articles by Lars P. Feld

Lars P. Feld

Walter Eucken Institute; University of Freiburg - College of Economics and Behavioral Sciences; CESifo (Center for Economic Studies and Ifo Institute)

Justina A.V. Fischer

affiliation not provided to SSRN

Gebhard Kirchgaessner

affiliation not provided to SSRN

Multiple version iconThere are 3 versions of this paper

Abstract

In political economics, the impact of institutions on income redistribution is mainly studied by comparing different forms of representative democracy. In this article, we analyze the influence of direct democratic institutions on redistribution first focusing on welfare and nonwelfare spending using yearly panel data for Swiss cantons. Then, we estimate a model, which explains the determinants of actually achieved redistribution measured by Gini coefficients. While our results indicate that less public funds are used to redistribute income, inequality is not reduced to a lesser extent in direct than in representative democracies for a given initial income distribution.

JEL Classification: D7, D78, I30, H75, H11

Suggested Citation

Feld, Lars P. and Fischer, Justina A.V. and Kirchgaessner, Gebhard, The Effect of Direct Democracy on Income Redistribution: Evidence for Switzerland. Economic Inquiry, Vol. 48, Issue 4, pp. 817-840, October 2010, Available at SSRN: https://ssrn.com/abstract=1677113 or http://dx.doi.org/10.1111/j.1465-7295.2008.00174.x

Lars P. Feld (Contact Author)

Walter Eucken Institute ( email )

Goethestrasse 10
Freiburg im Breisgau, Baden-Württemberg D-79100
Germany

University of Freiburg - College of Economics and Behavioral Sciences ( email )

Freiburg, D-79085
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Justina A.V. Fischer

affiliation not provided to SSRN

No Address Available

Gebhard Kirchgaessner

affiliation not provided to SSRN

No Address Available

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