Budget Referendums and Government Spending: Evidence from Swiss Cantons

Feld, Lars P.; Matsusaka, John G.

doi:10.2139/ssrn.239249

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Budget Referendums and Government Spending: Evidence from Swiss Cantons

33 Pages Posted: 6 Nov 2000

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)

John G. Matsusaka

University of Southern California - Marshall School of Business; USC Gould School of Law

There are 2 versions of this paper

Date Written: August 2000

Abstract

New government spending must be approved by a referendum of citizens in many Swiss cantons. This decisionmaking procedure seems like a simple way to address citizen-legislator agency problems, but little systematic evidence is available concerning its effect on spending outcomes. We estimate spending regressions for Swiss cantons using panel data from 1986 to 1997. After controlling for demographics and other determinants of spending, mandatory referendums on new spending are found to reduce the size of the budget by 17% for the median canton.

Keywords: Budget referendums, initiatives, government spending

JEL Classification: H0, H3

Suggested Citation: Suggested Citation

Feld, Lars P. and Matsusaka, John G., Budget Referendums and Government Spending: Evidence from Swiss Cantons (August 2000). Available at SSRN: https://ssrn.com/abstract=239249 or http://dx.doi.org/10.2139/ssrn.239249