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Voter preferences, direct democracy and government spending

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  • Funk, Patricia
  • Gathmann, Christina

Abstract

This article uses unique voting data on 331 federal propositions to estimate voter preferences in Swiss cantons. We document that preferences vary systematically with cantonal characteristics. In particular, cantons whose voters are more conservative, less in favor of redistribution and less supportive of public spending tend to have stronger direct democracy. We show that voter preferences have a stable and sizable effect on government spending even conditional on many observable cantonal characteristics. We then revisit the relationship between direct democracy and public spending. Once we fully control for voter preferences, the cross-sectional correlation between direct democracy and government spending declines by roughly 20%. The results in this article provide empirical support for models, in which both voter preferences and direct democratic institutions are important determinants of the size of government.

Suggested Citation

  • Funk, Patricia & Gathmann, Christina, 2013. "Voter preferences, direct democracy and government spending," European Journal of Political Economy, Elsevier, vol. 32(C), pages 300-319.
  • Handle: RePEc:eee:poleco:v:32:y:2013:i:c:p:300-319
    DOI: 10.1016/j.ejpoleco.2013.09.003
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    References listed on IDEAS

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    1. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 645-677.
    2. Patricia Funk & Christina Gathmann, 2011. "Does Direct Democracy Reduce the Size of Government? New Evidence from Historical Data, 1890–2000," Economic Journal, Royal Economic Society, vol. 121(557), pages 1252-1280, December.
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    Citations

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    Cited by:

    1. Christian F. Pfeil & Lars P. Feld, 2016. "Does the Swiss Debt Brake Induce Sound Federal Finances? A Synthetic Control Analysis," CESifo Working Paper Series 6044, CESifo Group Munich.
    2. repec:ces:ifodic:v:12:y:2014:i:1:p:19108848 is not listed on IDEAS
    3. Patricia Funk & Christina Gathmann, 2014. "Direct Democracy as a Disciplinary Device on Excessive Public Spending," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(1), pages 18-23, 04.
    4. Asatryan, Zareh & Baskaran, Thushyanthan & Heinemann, Friedrich, 2014. "The effect of direct democracy on the level and structure of local taxes," ZEW Discussion Papers 14-003, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Galletta, Sergio & Jametti, Mario, 2015. "How to tame two Leviathans? Revisiting the effect of direct democracy on local public expenditure in a federation," European Journal of Political Economy, Elsevier, vol. 39(C), pages 82-93.
    6. repec:eee:ecolet:v:155:y:2017:i:c:p:72-75 is not listed on IDEAS
    7. Felix Arnold & Ronny Freier, 2015. "Signature requirements and citizen initiatives: Quasi-experimental evidence from Germany," Public Choice, Springer, vol. 162(1), pages 43-56, January.
    8. Herwartz, Helmut & Theilen, Bernd, 2017. "Ideology and redistribution through public spending," European Journal of Political Economy, Elsevier, vol. 46(C), pages 74-90.
    9. Stadelmann, David & Portmann, Marco & Eichenberger, Reiner, 2014. "The law of large districts: How district magnitude affects the quality of political representation," European Journal of Political Economy, Elsevier, vol. 35(C), pages 128-140.
    10. repec:kap:pubcho:v:174:y:2018:i:1:d:10.1007_s11127-017-0486-0 is not listed on IDEAS
    11. repec:eee:regeco:v:65:y:2017:i:c:p:38-55 is not listed on IDEAS
    12. repec:kap:copoec:v:28:y:2017:i:3:d:10.1007_s10602-017-9240-3 is not listed on IDEAS

    More about this item

    Keywords

    Voter preferences; Direct democracy; Fiscal policy; Switzerland;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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