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Voter preferences, direct democracy and government spending

  • Funk, Patricia
  • Gathmann, Christina

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.

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Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 32 (2013)
Issue (Month): C ()
Pages: 300-319

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Handle: RePEc:eee:poleco:v:32:y:2013:i:c:p:300-319
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  1. Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe, 2006. "The Intergenerational Transmission of Risk and Trust Attitudes," IZA Discussion Papers 2380, Institute for the Study of Labor (IZA).
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  3. Patricia Funk & Christina Gathmann, 2007. "Does direct democracy reduce the size of government? New evidence from historical data, 1890-2000," Economics Working Papers 1123, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2008.
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  8. Schelker, Mark & Eichenberger, Reiner, 2010. "Auditors and fiscal policy: Empirical evidence on a little big institution," Journal of Comparative Economics, Elsevier, vol. 38(4), pages 357-380, December.
  9. Marius BRÜLHART & Mario JAMETTI, 2007. "Does Tax Competition Tame the Leviathan?," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 07.09, Université de Lausanne, Faculté des HEC, DEEP.
  10. Timothy Besley & Stephen Coate, 2000. "Issue Unbundling via Citizens' Initiatives," NBER Working Papers 8036, National Bureau of Economic Research, Inc.
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  12. Elisabeth R. Gerber & Jeffrey B. Lewis, 2004. "Beyond the Median: Voter Preferences, District Heterogeneity, and Political Representation," Journal of Political Economy, University of Chicago Press, vol. 112(6), pages 1364-1383, December.
  13. Jose Tavares, 2000. "Does Right or Left Matter? Cabinets, Credibility and Fiscal Adjustments," Econometric Society World Congress 2000 Contributed Papers 1548, Econometric Society.
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