IDEAS home Printed from https://ideas.repec.org/p/cdl/oplwec/qt1jc275p2.html
   My bibliography  Save this paper

Government Accountability and Fiscal Discipline: A panel analysis using Swiss data

Author

Listed:
  • Schaltegger, Christoph
  • Torgler, Benno

Abstract

Government accountability through electoral engagement, involvement and participation in the political debate can affect government performance. Using data for the full sample of Swiss cantons over the 1981–2001 period, this paper provides empirical evidence that government accountability is crucial for fiscal discipline. Specifically, in cantons with high levels of government accountability, the level of indebtedness is significantly lower, indicating that accountability supports fiscal discipline. To obtain a useful approximation for government accountability between citizens and their representatives, we use information from direct voter participation in political decisions (initiatives and public referenda) in Swiss state (cantonal) governments. Electoral support of government proposals reveals an important aspect of accountability in a real world setting.

Suggested Citation

  • Schaltegger, Christoph & Torgler, Benno, 2006. "Government Accountability and Fiscal Discipline: A panel analysis using Swiss data," Berkeley Olin Program in Law & Economics, Working Paper Series qt1jc275p2, Berkeley Olin Program in Law & Economics.
    • Handle: RePEc:cdl:oplwec:qt1jc275p2
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/1jc275p2.pdf;origin=repeccitec
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    2. Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio & Wacziarg, Romain, 2003. "Fractionalization," Journal of Economic Growth, Springer, vol. 8(2), pages 155-194, June.
    3. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    4. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    5. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    6. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
    7. Greif, Avner, 1998. "Historical and Comparative Institutional Analysis," American Economic Review, American Economic Association, vol. 88(2), pages 80-84, May.
    8. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    9. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
    10. Torsten Persson & Guido Tabellini, "undated". "Political Institutions and Policy Outcomes: What are the Stylized Facts?," Working Papers 189, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    11. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    12. Sijbren Cnossen & Hans-Werner Sinn (ed.), 2003. "Public Finance and Public Policy in the New Century," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033046, April.
    13. Hall, Alastair R & Rudebusch, Glenn D & Wilcox, David W, 1996. "Judging Instrument Relevance in Instrumental Variables Estimation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 283-298, May.
    14. International Monetary Fund, 2000. "Can Fiscal Decentralization Strengthen Social Capital?," IMF Working Papers 2000/129, International Monetary Fund.
    15. 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.
    16. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    17. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August.
    18. Daniel Kaufmann & Gil Mehrez & Tugrul Gurgur, 2019. "Voice or public sector management? An empirical investigation of determinants of public sector performance based on a survey of public officials," Journal of Applied Economics, Taylor & Francis Journals, vol. 22(1), pages 321-348, January.
    19. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    20. Markus Freitag & Adrian Vatter, 2000. "Direkte Demokratie, Konkordanz und Wirtschaftsleistung: Ein Vergleich der Schweizer Kantone," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 136(IV), pages 579-606, December.
    21. John G. Matsusaka, 2005. "Direct Democracy Works," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 185-206, Spring.
    22. Lars P. Feld & Gebhard Kirchgässner & Christoph A. Schaltegger, 2010. "Decentralized Taxation and the Size of Government: Evidence from Swiss State and Local Governments," Southern Economic Journal, John Wiley & Sons, vol. 77(1), pages 27-48, July.
    23. Lars P. Feld & Jan Schnellenbach & Christoph A Schaltegger, 2004. "On Government Centralization and Fiscal Referendums: A Theoretical Model and Evidence from Switzerland," Marburg Working Papers on Economics 200419, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    24. Luiz R. De Mello Jr., 2004. "Can Fiscal Decentralization Strengthen Social Capital?," Public Finance Review, , vol. 32(1), pages 4-35, January.
    25. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    26. Alberto Alesina & Roberto Perotti, 1995. "The Political Economy of Budget Deficits," IMF Staff Papers, Palgrave Macmillan, vol. 42(1), pages 1-31, March.
    27. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    28. James M. Poterba & Jürgen von Hagen, 1999. "Introduction to "Fiscal Institutions and Fiscal Performance"," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 1-12, National Bureau of Economic Research, Inc.
    29. Brueckner, Jan K., 1983. "Central-city income redistribution and the flight to the suburbs : A stylized model," Regional Science and Urban Economics, Elsevier, vol. 13(2), pages 177-193, May.
    30. Boix, Carles & Posner, Daniel N., 1998. "Social Capital: Explaining Its Origins and Effects on Government Performance," British Journal of Political Science, Cambridge University Press, vol. 28(4), pages 686-693, October.
    31. Benno Torgler, 2005. "Tax morale in Latin America," Public Choice, Springer, vol. 122(1), pages 133-157, January.
    32. Susan Rose-Ackerman, "undated". "Trust, Honesty, and Corruption: Reflection on the State-Building Process," Yale Law School John M. Olin Center for Studies in Law, Economics, and Public Policy Working Paper Series yale_lepp-1013, Yale Law School John M. Olin Center for Studies in Law, Economics, and Public Policy.
    33. Poterba, James M. & von Hagen, Jurgen (ed.), 1999. "Fiscal Institutions and Fiscal Performance," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226676234.
    34. Ronald J. Shadbegian, 1999. "Fiscal Federalism, Collusion, and Government Size: Evidence from the States," Public Finance Review, , vol. 27(3), pages 262-281, May.
    35. James M. Poterba & Jürgen von Hagen, 1999. "Fiscal Institutions and Fiscal Performance," NBER Books, National Bureau of Economic Research, Inc, number pote99-1.
    36. Schaltegger Christoph A., 2003. "Fiskalischer Föderalismus und Staatstätigkeit," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 52(1), pages 84-110, April.
    37. Matsusaka, John G., 2004. "For the Many or the Few," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226510811, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benno Torgler & Christoph A. Schaltegger, 2005. "Trust and Fiscal Performance: A Panel Analysis with Swiss Data," Working Papers 2005.61, Fondazione Eni Enrico Mattei.
    2. Dinda, Soumyananda, 2015. "Social Preference and Governance: A Case Study in India," MPRA Paper 75828, University Library of Munich, Germany, revised 14 Apr 2015.
    3. Dinda, Soumyananda, 2014. "Social Capital and Performance of Fiscal Institution in India during 1991-2012," MPRA Paper 75827, University Library of Munich, Germany, revised 26 Jun 2015.
    4. Torgler, Benno & Schneider, Friedrich, 2009. "The impact of tax morale and institutional quality on the shadow economy," Journal of Economic Psychology, Elsevier, vol. 30(2), pages 228-245, April.
    5. Richard M. Bird & Jorge Martinez-Vazquez & Benno Torgler, 2014. "Societal Institutions and Tax Effort in Developing Countries," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 301-351, May.
    6. Torgler, Benno & Schneider, Friedrich, 2007. "Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis," Berkeley Olin Program in Law & Economics, Working Paper Series qt26s710z8, Berkeley Olin Program in Law & Economics.
    7. Lassen, David Dreyer, 2007. "Ethnic divisions, trust, and the size of the informal sector," Journal of Economic Behavior & Organization, Elsevier, vol. 63(3), pages 423-438, July.
    8. Stephen Knowles & P. Dorian Owen, 2010. "Which Institutions are Good for Your Health? The Deep Determinants of Comparative Cross-country Health Status," Journal of Development Studies, Taylor & Francis Journals, vol. 46(4), pages 701-723.
    9. Quamrul Ashraf & Oded Galor, 2008. "Human Genetic Diversity and Comparative Economic Development," 2008 Meeting Papers 617, Society for Economic Dynamics.
    10. R. Grafton & Tom Kompas & P. Owen, 2007. "Bridging the barriers: knowledge connections, productivity and capital accumulation," Journal of Productivity Analysis, Springer, vol. 28(3), pages 219-231, December.
    11. Justina A.V. Fischer & Benno Torgler, 2006. "Does Envy Destroy Social Fundamentals? The Impact of Relative Income Position on Social Capital," University of St. Gallen Department of Economics working paper series 2006 2006-04, Department of Economics, University of St. Gallen.
    12. Bergh, Andreas & Bjørnskov, Christian, 2014. "Trust, welfare states and income equality: Sorting out the causality," European Journal of Political Economy, Elsevier, vol. 35(C), pages 183-199.
    13. Beugelsdijk, Sjoerd & Klasing, Mariko J., 2016. "Diversity and trust: The role of shared values," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 522-540.
    14. Algan, Yann & Cahuc, Pierre, 2014. "Trust, Growth, and Well-Being: New Evidence and Policy Implications," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 49-120, Elsevier.
    15. Knack, Stephen, 2002. "Governance and growth: measurement and evidence," MPRA Paper 28050, University Library of Munich, Germany.
    16. Christoph A. Schaltegger & Lars P. Feld, 2008. "Do Large Cabinets Favor Large Governments? Evidence on Institutional Restraints on the Fiscal Commons Problem for Swiss Cantons," CREMA Working Paper Series 2008-10, Center for Research in Economics, Management and the Arts (CREMA).
    17. Philippe Aghion & Yann Algan & Pierre Cahuc & Andrei Shleifer, 2010. "Regulation and Distrust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(3), pages 1015-1049.
    18. Stefan Voigt, 2011. "Positive constitutional economics II—a survey of recent developments," Public Choice, Springer, vol. 146(1), pages 205-256, January.
    19. Guiso, Luigi & Zingales, Luigi & Sapienza, Paola, 2010. "Civic Capital as the Missing Link," CEPR Discussion Papers 7757, C.E.P.R. Discussion Papers.
    20. Sangnier, Marc, 2013. "Does trust favor macroeconomic stability?," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 653-668.

    More about this item

    Keywords

    Z130; H110; O170; D720; E620;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:oplwec:qt1jc275p2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lisa Schiff (email available below). General contact details of provider: https://edirc.repec.org/data/lebrkus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.