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The Effect of Direct Democratic Institutions on Income Redistribution: Evidence for Switzerland

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Author Info
Feld, Lars P. () (Alfred-Weber-Institute, Ruprecht-Karls-University of Heidelberg)
Fischer, Justina A.V. () (Dept. of Economics, Stockholm School of Economics)
Kirchgaessner, Gebhard () (SIAW-HSG, University of St. Gallen)

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Abstract

There is an intensive dispute in political economics about the impact of institutions on income redistribution. While the main focus is on comparison between different forms of representative democracy, the influence of direct democracy on redistribution has attracted much less attention. In this paper, employing both a composite index and measures of single institutions, we find that direct democracy is particularly associated with lower welfare spending. Moreover, we estimate a model which explains the determinants of achieved redistribution measured by Gini coefficients using panel data provided by the Swiss Federal Tax Office from 1981 to 1997. While our results indicate that less public funds are used to redistribute income and actual redistribution is lower, inequality is not reduced to a lesser extent in direct than in representative democracies for a given initial income distribution.

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Publisher Info
Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 689.

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Length: 40 pages
Date of creation: 30 Apr 2007
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Handle: RePEc:hhs:hastef:0689

Note: completely revised version of CESifo working paper No. 1837, published in 2006
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Related research
Keywords: Income Redistribution; Direct Democracy; Referendums; Initiatives;

Find related papers by JEL classification:
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Health, Education, and Welfare
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fischer, Justina AV, 2009. "Development of Direct Democracy in Swiss Cantons between 1997 and 2003," MPRA Paper 16140, University Library of Munich, Germany. [Downloadable!]
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