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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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    Keywords

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    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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