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Public Choice by Referenda or Delegation. An Experimental Comparison of Direct and Indirect Democracy

Author

Listed:
  • Werner Gueth

    ()

  • Martin Kocher
  • Katinka Pantz

    ()

  • Matthias Sutter

    ()

Abstract

Direct democracy with its use of referenda avoids the prototypical principal-agent problems of delegation in indirect democracies, especially since elected representatives are usually not committed by law to keep their promises. Sequential or more complex referenda may, however, result in an inferior combination of realized policy measures. Thus, it is an open question which type of institution (direct or indirect democracy) will be more efficient. Our experimental study explores this issue and finds that direct democracy seems to perform better.

Suggested Citation

  • Werner Gueth & Martin Kocher & Katinka Pantz & Matthias Sutter, 2004. "Public Choice by Referenda or Delegation. An Experimental Comparison of Direct and Indirect Democracy," Papers on Strategic Interaction 2004-04, Max Planck Institute of Economics, Strategic Interaction Group.
  • Handle: RePEc:esi:discus:2004-04
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    File URL: ftp://papers.econ.mpg.de/esi/discussionpapers/2004-04.pdf
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    References listed on IDEAS

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    1. Frey, Bruno S & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," Economic Journal, Royal Economic Society, vol. 110(466), pages 918-938, October.
    2. Feld, Lars P. & Matsusaka, John G., 2003. "Budget referendums and government spending: evidence from Swiss cantons," Journal of Public Economics, Elsevier, vol. 87(12), pages 2703-2724, December.
    3. Timothy Besley & Stephen Coate, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 85-114.
    4. Lars P. Feld & Gebhard Kirchgassner, 1999. "Public Debt and Budgetary Procedures: Top Down or Bottom Up? Some Evidence from Swiss Municipalities," NBER Chapters,in: Fiscal Institutions and Fiscal Performance, pages 151-180 National Bureau of Economic Research, Inc.
    5. repec:cup:apsrev:v:72:y:1978:i:02:p:575-598_15 is not listed on IDEAS
    6. Matsusaka, John G, 1995. "Fiscal Effects of the Voter Initiative: Evidence from the Last 30 Years," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 587-623, June.
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    Cited by:

    1. Seebauer, Michael, 2015. "Does direct democracy foster efficient policies? An experimental investigation of costly initiatives," FAU Discussion Papers in Economics 01/2015, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    2. Lars P. Feld, 2007. "Ex Interim Voting: An Experimental Study of Referendums for Public-Good Provision. Comment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 75-80, March.

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    Keywords

    referenda; delegation; experiment;

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