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Voter preferences, direct democracy and government spending

Patricia Funk () and Christina Gathmann ()

European Journal of Political Economy, 2013, vol. 32, issue C, 300-319

Abstract: This article uses unique voting data on 331 federal propositions to estimate voter preferences in Swiss cantons. We document that preferences vary systematically with cantonal characteristics. In particular, cantons whose voters are more conservative, less in favor of redistribution and less supportive of public spending tend to have stronger direct democracy. We show that voter preferences have a stable and sizable effect on government spending even conditional on many observable cantonal characteristics. We then revisit the relationship between direct democracy and public spending. Once we fully control for voter preferences, the cross-sectional correlation between direct democracy and government spending declines by roughly 20%. The results in this article provide empirical support for models, in which both voter preferences and direct democratic institutions are important determinants of the size of government.

Keywords: Voter preferences; Direct democracy; Fiscal policy; Switzerland (search for similar items in EconPapers)
JEL-codes: H11 H50 D78 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:32:y:2013:i:c:p:300-319

DOI: 10.1016/j.ejpoleco.2013.09.003

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