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The economic effects of direct democracy—a first global assessment

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Author Info

  • Lorenz Blume
  • Jens Müller
  • Stefan Voigt

    ()

Abstract

This is the first study that assesses the economic effects of direct democratic institutions on a cross country basis. Its results are based on up to six new measures produced to reflect the legislative basis for using direct democratic institutions as well as their factual use. In addition, a more general overall indicator is used. On the basis of these two different data sets only some of the results of the former intra-country studies are confirmed. An analysis based on the more general democracy index for 87 countries shows that a higher degree of direct democracy leads to lower budget deficits and higher government effectiveness. The effects on government expenditure, corruption and productivity have the expected signs but do not reach conventional levels of significance. A more fine grained analysis for a cross section of 88 countries based on the second data set shows that institutional detail matters a great deal. In particular, the mere possibility of drawing on direct-democratic institutions is often not sufficient to induce significant effects whereas the frequency of their factual use has a number of substantive effects on economic variables.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s11127-009-9429-8
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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 140 (2009)
Issue (Month): 3 (September)
Pages: 431-461

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Handle: RePEc:kap:pubcho:v:140:y:2009:i:3:p:431-461

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Web page: http://www.springerlink.com/link.asp?id=100332

Related research

Keywords: Direct democracy; Economic effects of constitutions; Positive constitutional economics;

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References

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  1. Nadia Fiorino & Roberto Ricciuti, 2007. "Determinants of Direct Democracy," CESifo Working Paper Series 2035, CESifo Group Munich.
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  4. Feld, Lars P & Savioz, Marcel R, 1997. "Direct Democracy Matters for Economic Performance: An Empirical Investigation," Kyklos, Wiley Blackwell, vol. 50(4), pages 507-38.
  5. Feld, Lars P. & Schaltegger, Christoph A. & Schnellenbach, Jan, 2008. "On government centralization and fiscal referendums," European Economic Review, Elsevier, vol. 52(4), pages 611-645, May.
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  15. Lars P. Feld & Stefan Voigt, 2003. "Economic Growth and Judicial Independence: Cross Country Evidence Using a New Set of Indicators," CESifo Working Paper Series 906, CESifo Group Munich.
  16. Torgler, Benno, 2005. "Tax morale and direct democracy," European Journal of Political Economy, Elsevier, vol. 21(2), pages 525-531, June.
  17. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753.
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Citations

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Cited by:
  1. Stefan Voigt, 2011. "Positive constitutional economics II—a survey of recent developments," Public Choice, Springer, vol. 146(1), pages 205-256, January.
  2. Voigt, Stefan, 2011. "Empirical constitutional economics: Onward and upward?," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 319-330.
  3. Gebhard Kirchgässner, 2010. "Direkte Demokratie," CREMA Working Paper Series 2010-16, Center for Research in Economics, Management and the Arts (CREMA).
  4. Bjornskov, Christian & Dreher, Axel & Fischer, Justina AV, 2008. "Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence," MPRA Paper 20488, University Library of Munich, Germany, revised 06 Feb 2010.
  5. Katarzyna Metelska-Szaniawska, 2009. "Constitutions and economic reforms in transition: an empirical study," Constitutional Political Economy, Springer, vol. 20(1), pages 1-41, March.
  6. Christian Bjørnskov & Martin Paldam, 2012. "The spirits of capitalism and socialism," Public Choice, Springer, vol. 150(3), pages 469-498, March.
  7. Friedrich Schneider & Désirée Teobaldelli, 2012. "Beyond the Veil of Ignorance: The Influence of Direct Democracy on the Shadow Economy," CESifo Working Paper Series 3749, CESifo Group Munich.
  8. Simon Hug, 2009. "Some thoughts about referendums, representative democracy, and separation of powers," Constitutional Political Economy, Springer, vol. 20(3), pages 251-266, September.

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