Compulsory Voting and Public Finance

Roland Hodler

No 10.04, Working Papers from Swiss National Bank, Study Center Gerzensee

Abstract: Conventional wisdom suggests that compulsory voting lowers the influence of specialinterest groups and leads to policies that are better for less privileged citizens, who often abstain when voting is voluntary. To scrutinize this conventional wisdom, I study public goods provision and rents to specialinterest groups in a probabilistic voting model with campaign contributions in which citizens can decide how much political information to acquire, and whether to vote or abstain. I find that compulsory voting, modeled as an increase in abstention costs, raises the share of poorly informed and impressionable voters, thereby making special-interest groups more influential and increasing their rents. Total government spending and taxes increase as well, while the effect on public goods provision is ambiguous. Compulsory voting may thus lead to policy changes that harm even less privileged citizens.

Pages: 25 pages
Date: 2010-11
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-pol
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