The Impact of Direct Democracy on Public Education: Performance of Swiss Students in Reading

This paper analyzes the impact of direct legislation at the cantonal level on the quality of public education in Switzerland, using a cross-section of individual data on reading performance similar to that used in the OECD-PISA study. For this purpose, a structural and a reduced form of an educational production function is estimated. The OLS esti­mate of a composite index of direct democracy supports the findings previously ob­tained for U.S. states in which initiative-driven tax limits have had a deleterious effect on student performance in public schools. For a more complete picture, the impact of direct democracy on several portions of the conditional test score distribution is also in­vestigated using a quantile regression method. The negative impact appears to be equal in size between the estimated quantiles and to occur exclusively through the budgetary channel. Moreover, the equipment of schools is found to matter for student per­formance. Finally, no redistributive influence on students attending the same class is found.