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The Political Economy of Direct Legislation
Type
fundamental research project
Start Date
01 January 2000
End Date
31 December 2004
Status
completed
Keywords
Direct democracy
budget
budget deficit
crime
education
welfare
tax
Description
Nationalforschungsprojekt
Leader contributor(s)
Fischer, Justina
Partner(s)
Prof. Kirchgaessner
Prof. Feld
Dr. Ch. Schaltegger
Funder(s)
Topic(s)
see above
Method(s)
Econometrics
Notes
Projektmitarbeiterin seit dem 1.04.2005 bis Ende des Projekts.
Range
Institute/School
Range (De)
Institut/School
Eprints ID
21240
4 results
Now showing
1 - 4 of 4
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PublicationThe Effect of Direct Democracy on Income Redistribution: Evidence for SwitzerlandThere is an intensive dispute in political economics about the impact of institutions on income redistribution. While the main focus is on comparison between different forms of representative democracy, the influence of direct democracy on redistribution has attracted much less attention. According to theoretical arguments and previous empirical results, government policies of income redistribution are expected to be more in line with median voter preferences in direct than in representative democracies. In this paper, we find that institutions of direct democracy are associated with lower public spending and revenue, particularly lower welfare spending and broad-based income and property (wealth) tax revenue. Moreover, we estimate a model which explains the determinants of redistribution using panel data provided by the Swiss Federal Tax Office from 1981 to 1997 and a cross section of (representative) individual data from 1992. While our results indicate that less public funds are used to redistribute income and actual redistribution is lower, inequality is not reduced to a lesser extent in direct than in representative democracies for a given initial income distribution. This finding might well indicate the presence of efficiency gains in redistribution policies.Type: discussion paperIssue: No 1837
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PublicationThe Impact of Direct Democracy on Crime: Is the Median Voter Boundedly Rational?(University of St. Gallen, Department of Economics, 2005)Fischer, JustinaDirect democracy is believed to lead to an allocation of resources that is closer to the median voter's preferences. If, however, the median voter suffers from bounded rationality, the allocation of public goods actually achieved should be affected. Based on recent empirical findings by economic psychologists, optimism bias and availability heuristic are assumed to influence the median voter's preferences for public safety; particularly, (1) a preference for lower spending on crime prevention and (2) a preference for fighting property crime to fighting violent crime is hypothesized. In consequence, in more direct democratic systems, a re-allocation of scarce means in favor of property crimes should be observed. Estimation of a structural economic model of crime using Swiss cantonal crime rates from 1986 to 2001 corroborates these hypotheses.
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PublicationDo Institutions of Direct Democracy Tame the Leviathan ?(CESifo Munich, 2005-12-07)Fischer, JustinaIdentification of a deleterious impact of institutions of direct legislation on student performance by studies for both the U.S. and Switzerland has raised the question of the exact transmission channels for this impact. Studies for the U.S. that find an increase in the ratio of administrative to instructional spending and larger class sizes support the hypothesis of a Leviathan-like school administration. However, research for Switzerland using a time-series panel of sub-federal school expenditure and class size detects no such effect. These findings are in line with previous analyses that identify efficiency gains in the provision of public goods for Switzerland.Type: discussion paperIssue: No 1628
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PublicationThe Impact of Direct Democracy on Public Education: Performance of Swiss Students in Reading(University of St. Gallen, Department of Economics, 2005)Fischer, JustinaThis 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.