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Protestantism and Government Spending: a Negative Relationship? An Empirical Application to Swiss Cantons

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Author Info
Fischer, Justina AV () (Dept. of Economics, Stockholm School of Economics)
Schneider, Friedrich () (Department of Economics, University of Linz)

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Abstract

Recent empirical growth literature suggests that cultural factors play a decisive role in economic development, while empirical evidence for their impact on government activity remains scant. In this paper, we conjecture based on Weber’s Protestant Ethics that ‚Protestant values’ such as self-reliance and austerity should affect both the size and scope of governments. More specifically, we hypothesize that smaller government budgets should be observable in more Protestant jurisdictions. Using a panel of sub-federal expenditure in 26 Swiss cantons from 1980 to 1998 we find supporting evidence, observing that the share of Protestants in the cantonal residential population exerts a spending dampening impact. Our results suggest that cultural factors should not be omitted from future public finance analyses.

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Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 685.

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Length: 26 pages
Date of creation: 19 Dec 2007
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Handle: RePEc:hhs:hastef:0685

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Related research
Keywords: Protestantism; Culture; Government Spending; Public Finance;

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Find related papers by JEL classification:
A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
Z10 - Other Special Topics - - Cultural Economics - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lars P. Feld & Justina A.V. Fischer & Gebhard Kirchgassner, 2006. "The Effect of Direct Democracy on Income Redistribution: Evidence for Switzerland," CREMA Working Paper Series 2006-24, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
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  2. Feld, Lars P. & Matsusaka, John G., 2003. "Budget referendums and government spending: evidence from Swiss cantons," Journal of Public Economics, Elsevier, vol. 87(12), pages 2703-2724, December. [Downloadable!] (restricted)
  3. Tiago Cavalcanti & Stephen Parente & Rui Zhao, 2007. "Religion in macroeconomics: a quantitative analysis of Weber’s thesis," Economic Theory, Springer, vol. 32(1), pages 105-123, July. [Downloadable!] (restricted)
  4. Feld, Lars P & Kirchgassner, Gebhard, 2001. " Does Direct Democracy Reduce Public Debt? Evidence from Swiss Municipalities," Public Choice, Springer, vol. 109(3-4), pages 347-70, December. [Downloadable!] (restricted)
  5. Alois Stutzer, . "Demokratieindizes für die Kantone der Schweiz," IEW - Working Papers iewwp023, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  6. Michael Rauscher, 1997. "Protestant Ethic, Status Seeking, and Economic Growth," Thuenen-Series of Applied Economic Theory 09, University of Rostock, Institute of Economics, Germany. [Downloadable!]
  7. David Dorn & Justina Fischer & Gebhard Kirchgässner & Alfonso Sousa-Poza, 2008. "Direct democracy and life satisfaction revisited: new evidence for Switzerland," Journal of Happiness Studies, Springer, vol. 9(2), pages 227-255, June. [Downloadable!] (restricted)
  8. Christian Bjørnskov & Axel Dreher & Justina Fischer, 2007. "The bigger the better? Evidence of the effect of government size on life satisfaction around the world," Public Choice, Springer, vol. 130(3), pages 267-292, March. [Downloadable!] (restricted)
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  9. Lars P Feld & Gebhard Kirchgässner, 2001. "The political economy of direct legislation: direct democracy and local decision-making," Economic Policy, CEPR, CES, MSH, vol. 16(33), pages 329-367, October. [Downloadable!] (restricted)
  10. Weingast, Barry R, 1995. "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics and Organization, Oxford University Press, vol. 11(1), pages 1-31, April.
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