Public Policy and the Initiative and Referendum: A Survey with Some New Evidence

67 Pages Posted: 14 Apr 2017 Last revised: 6 Nov 2017

See all articles by John G. Matsusaka

John G. Matsusaka

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

Date Written: November 5, 2017

Abstract

This paper surveys the extensive literature that seeks to estimate the effect of the initiative and referendum on public policy. The evidence on the referendum uniformly finds that requiring voter approval for new spending (or new debt) results in lower spending (or lower debt). The initiative process is associated with lower spending and taxes in American states and Swiss cantons, but with higher spending in cities. The initiative is consistently associated with more conservative social policies. Policies are more likely to be congruent with majority opinion in states with the initiative process than states without the initiative, suggesting that direct democracy allows the majority to counteract the power of special interests in policy making.

Keywords: Direct Democracy, Initiative, Referendum, Public Policy, Political Economy, Representation

JEL Classification: D7, H1, H2, H3, H4, H7, P48

Suggested Citation

Matsusaka, John G., Public Policy and the Initiative and Referendum: A Survey with Some New Evidence (November 5, 2017). Available at SSRN: https://ssrn.com/abstract=2951455 or http://dx.doi.org/10.2139/ssrn.2951455

John G. Matsusaka (Contact Author)

University of Southern California - Marshall School of Business ( email )

Department of Finance & Business Economics
Los Angeles, CA 90089
United States
213-740-6495 (Phone)
213-740-6650 (Fax)

USC Gould School of Law

699 Exposition Boulevard
Los Angeles, CA 90089
United States
213-740-6495 (Phone)

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