Fiscal Equlisation and Citizen's Preferences : Evidence from Swiss Municipalities
The normative literature on fiscal federalism generally recognises the need for fiscal equalisation mechanisms to facilitate the mitigation of inequities in the distribution of resources. The question of how far to go in matters of fiscal equalisation is a very sensitive one. Choices in this area reflect the prevailing social norms and the political debates, in the context of which these norms are expressed. Moreover, the political debates are characterised by the usual tensions between selfish and altruistic visions of society. The empirical part of this contribution analyses the results of two referenda recently held in the Canton of Vaud in Switzerland. It provides explanatory models for both ballots (acceptance rate of the propositions in each municipality). The model’s explanatory variables show that the people of Vaud’s voting behaviour was basically selfish. The widespread belief that voters are capable of altruism in this particular area is, therefore, rejected.
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