Does Direct Democracy Reduce the Size of Government? New Evidence from Historical Data, 1890-2000

• 成果类型: Article
• 署名作者: Funk, Patricia; Gathmann, Christina
• 署名单位: University of Mannheim; Leibniz Association; Ifo Institut; IZA Institute Labor Economics; Pompeu Fabra University
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2011.02451.x
• 发表日期: 2011
• 页码: 1252-1280
• 关键词: POLITICAL-ECONOMY; institutions; voters; POLICY

摘要

Using new historical data from Swiss cantons, we estimate the effect of direct democracy on government spending. We use fixed effects to control for unobserved heterogeneity and new instruments to address potential endogeneity concerns. We find that direct democracy constrains canton spending but its effect is more modest than previously suggested. The instrumental variable estimates show that a mandatory budget referendum reduces canton expenditures by 12%. Lowering signature requirements for the voter initiative by 1% reduces canton spending by 0.6%. We find little evidence that direct democracy at the canton level results in higher local spending or decentralisation.