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Direkte Demokratie

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  • Gebhard Kirchgässner

Abstract

The current debt crisis in many OECD countries calls for adequate strategies in budget consolidation. To regain fiscal solvency many governments base their fiscal adjustments at least partly on spending cuts. A common political claim is that spending cuts rely too much on investment thereby undermining future long-term growth perspectives. We study the effect of fiscal adjustments on economic growth, consumption and investment for a panel of 20 OECD countries during the 1970-2008 period. Our results support the idea of expansionary consolidations in the case of sizeable adjustments and through spending cuts. The effect is primarily a result of increased consumption rather than investment. While fiscal adjustments also boost private investment, this tends to be offset by a corresponding reduction in government investment. Fiscal consolidations therefore hardly affect total investment.

Suggested Citation

  • Gebhard Kirchgässner, 2010. "Direkte Demokratie," CREMA Working Paper Series 2010-16, Center for Research in Economics, Management and the Arts (CREMA).
  • Handle: RePEc:cra:wpaper:2010-16
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    References listed on IDEAS

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    8. Lars P. Feld & Bruno S. Frey, 2002. "Trust breeds trust: How taxpayers are treated," Economics of Governance, Springer, vol. 3(2), pages 87-99, July.
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    Citations

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    Cited by:

    1. Christoph A. Schaltegger & Lars P. Feld, 2004. "Do Large Cabinets Favor Large Governments? Evidence from Swiss Sub-Federal Jurisdictions," CESifo Working Paper Series 1294, CESifo Group Munich.
    2. Lars P. Feld & Bruno S. Frey, 2002. "Trust breeds trust: How taxpayers are treated," Economics of Governance, Springer, vol. 3(2), pages 87-99, July.
    3. Christoph A. Schaltegger & Lars P. Feld, 2001. "On Government Centralization and Budget Referendums: Evidence from Switzerland," CESifo Working Paper Series 615, CESifo Group Munich.
    4. Lars P. Feld & Jan Schnellenbach & Christoph A Schaltegger, 2004. "On Government Centralization and Fiscal Referendums: A Theoretical Model and Evidence from Switzerland," Marburg Working Papers on Economics 200419, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Mark Schelker & Reiner Eichenberger, 2003. "Starke Rechnungsprüfungskommissionen: Wichtiger als direkte Demokratie und Föderalismus? Ein erster Blick auf die Daten," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(III), pages 351-373, September.
    6. Bruno S. Frey & Marcel Kucher & Alois Stutzer, "undated". "Outcome, Process & Power in Direct Democracy," IEW - Working Papers 025, Institute for Empirical Research in Economics - University of Zurich.
    7. Gebhard Kirchgässner, 2002. "Auswirkungen der direkten Demokratie auf die öffentlichen Finanzen: Empirische Ergebnisse für die Schweiz," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 138(IV), pages 411-426, December.
    8. Bruno S. Frey & Alois Stutzer, 2001. "Beyond Bentham – Measuring Procedural Utility," CESifo Working Paper Series 492, CESifo Group Munich.
    9. Bruno Frey & Alois Stutzer, 2006. "Strengthening the citizens' role in international organizations," The Review of International Organizations, Springer, vol. 1(1), pages 27-43, March.

    More about this item

    Keywords

    Democracy; Information; Human Rights; Political Reforms; Switzerland; United States;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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