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The Welfare Consequences of Centralization: Evidence from a Quasi-Natural Experiment in Switzerland

Author

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  • Sarah Flèche

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science)

Abstract

Many countries are reallocating tasks and powers to more central levels of government. To identify centralization's welfare effects, I use a difference-in-differences design that relies on time and cross-cantonal variation in the implementation of centralization reforms in Switzerland. I find that centralization provokes significant decreases in residents' life satisfaction. I identify one mechanism driving the effect, namely the procedural disutility that individuals experience from having less influence over the formulation of political decisions. This effect is largest among individuals with higher expected benefits from being involved in the political decision process, with detrimental effects on local political participation.

Suggested Citation

  • Sarah Flèche, 2021. "The Welfare Consequences of Centralization: Evidence from a Quasi-Natural Experiment in Switzerland," Post-Print hal-02613181, HAL.
  • Handle: RePEc:hal:journl:hal-02613181
    DOI: 10.1162/rest_a_00894
    Note: View the original document on HAL open archive server: https://amu.hal.science/hal-02613181
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    Cited by:

    1. Gabriel Loumeau & Christian Stettler, 2021. "Fiscal Autonomy and Self-Determination," CESifo Working Paper Series 9445, CESifo.

    More about this item

    Keywords

    centralization; life satisfaction; procedural utility; political participation;
    All these keywords.

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