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The Effect Of Direct Democracy On Income Redistribution: Evidence For Switzerland

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  • LARS P. FELD
  • JUSTINA A.V. FISCHER
  • GEBHARD KIRCHGÄSSNER

Abstract

In political economics, the impact of institutions on income redistribution is mainly studied by comparing different forms of representative democracy. In this article, we analyze the influence of direct democratic institutions on redistribution first focusing on welfare and nonwelfare spending using yearly panel data for Swiss cantons. Then, we estimate a model, which explains the determinants of actually achieved redistribution measured by Gini coefficients. While our results indicate that less public funds are used to redistribute income, inequality is not reduced to a lesser extent in direct than in representative democracies for a given initial income distribution. (JEL D7, D78, I30, H75, H11)

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  • Lars P. Feld & Justina A.V. Fischer & Gebhard Kirchgässner, 2010. "The Effect Of Direct Democracy On Income Redistribution: Evidence For Switzerland," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 817-840, October.
    • Handle: RePEc:bla:ecinqu:v:48:y:2010:i:4:p:817-840
    DOI: 10.1111/j.1465-7295.2008.00174.x
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    More about this item

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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