This paper gives a survey of the empirical results of the impact of direct popular rights on public finances which have been achieved in a project financed by the Swiss National Science Foundation. Using panel data from the Swiss cantons from 1986 to 1997 and cross-section data from the Swiss local communities from 1990 it has been shown that the fiscal referendum leads on both governmental levels to lower public expenditure and revenue. At the local level it also brings about lower public debt. In conjunction with other, available empirical evidence this shows that direct democracy fosters sounder public finances. The results also indicate that it would be favourable to introduce a fiscal referendum at the national level.
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Volume (Year): 138 (2002) Issue (Month): IV (December) Pages: 411-426 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
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