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Direkte Demokratie

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  • Gebhard Kirchgässner

Abstract

The current debt crisis in many OECD countries calls for adequate strategies in budget consolidation. To regain fiscal solvency many governments base their fiscal adjustments at least partly on spending cuts. A common political claim is that spending cuts rely too much on investment thereby undermining future long-term growth perspectives. We study the effect of fiscal adjustments on economic growth, consumption and investment for a panel of 20 OECD countries during the 1970-2008 period. Our results support the idea of expansionary consolidations in the case of sizeable adjustments and through spending cuts. The effect is primarily a result of increased consumption rather than investment. While fiscal adjustments also boost private investment, this tends to be offset by a corresponding reduction in government investment. Fiscal consolidations therefore hardly affect total investment.

Suggested Citation

  • Gebhard Kirchgässner, 2010. "Direkte Demokratie," CREMA Working Paper Series 2010-16, Center for Research in Economics, Management and the Arts (CREMA).
    • Handle: RePEc:cra:wpaper:2010-16
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    References listed on IDEAS

    as
    1. Lars P. Feld & Justina A.V. Fischer & Gebhard Kirchgässner, 2010. "The Effect Of Direct Democracy On Income Redistribution: Evidence For Switzerland," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 817-840, October.
    2. Lars P. Feld & Gebhard Kirchgässner, 2003. "Die Rolle des Staates in privaten Governance Strukturen," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(III), pages 253-285, September.
    3. Patricia Funk & Christina Gathmann, 2011. "Does Direct Democracy Reduce the Size of Government? New Evidence from Historical Data, 1890–2000," Economic Journal, Royal Economic Society, vol. 121(557), pages 1252-1280, December.
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    5. Gebhard Kirchgässner, 2009. "Direkte Demokratie und Menschenrechte," University of St. Gallen Department of Economics working paper series 2009 2009-27, Department of Economics, University of St. Gallen.
    6. Lorenz Blume & Jens Müller & Stefan Voigt, 2009. "The economic effects of direct democracy—a first global assessment," Public Choice, Springer, vol. 140(3), pages 431-461, September.
    7. Frey, Bruno S & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," Economic Journal, Royal Economic Society, vol. 110(466), pages 918-938, October.
    8. Feld, Lars P. & Schaltegger, Christoph A. & Schnellenbach, Jan, 2008. "On government centralization and fiscal referendums," European Economic Review, Elsevier, vol. 52(4), pages 611-645, May.
    9. Gebhard Kirchgässner, 2008. "Direct democracy: obstacle to reform?," Constitutional Political Economy, Springer, vol. 19(2), pages 81-93, June.
    10. 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.
    11. Lars P. Feld & Bruno S. Frey, 2002. "Trust breeds trust: How taxpayers are treated," Economics of Governance, Springer, vol. 3(2), pages 87-99, July.
    12. Matthias Benz & Alois Stutzer, 2004. "Are Voters Better Informed When They Have a Larger Say in Politics? -- Evidence for the European Union and Switzerland," Public Choice, Springer, vol. 119(1_2), pages 31-59, April.
    13. Christoph A. Schaltegger & René L. Frey, 2003. "Finanzausgleich und Föderalismus: Zur Neugestaltung der föderalen Finanzbeziehungen am Beispiel der Schweiz," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 4(2), pages 239-258, May.
    14. Matsusaka, John G, 2000. "Fiscal Effects of the Voter Initiative in the First Half of the Twentieth Century," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 619-650, October.
    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. 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.
    17. Lars P. Feld & Gebhard Kirchgaessner & 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.
    18. Bruno S. Frey, 2018. "Economics of Happiness," SpringerBriefs in Economics, Springer, number 978-3-319-75807-7, February.
    19. Lars P. Feld & Marcel R. Savioz, 1997. "Direct Democracy Matters for Economic Performance: An Empirical Investigation," Kyklos, Wiley Blackwell, vol. 50(4), pages 507-538, November.
    20. Blomberg, S. Brock & Hess, Gregory D. & Weerapana, Akila, 2004. "The impact of voter initiatives on economic activity," European Journal of Political Economy, Elsevier, vol. 20(1), pages 207-226, March.
    21. Pommerehne, Werner W & Weck-Hannemann, Hannelore, 1996. "Tax Rates, Tax Administration and Income Tax Evasion in Switzerland," Public Choice, Springer, vol. 88(1-2), pages 161-170, July.
    22. repec:bla:kyklos:v:50:y:1997:i:4:p:507-38 is not listed on IDEAS
    23. Lars P. Feld & Gebhard Kirchgässner, 2003. "The Role of Direct Democracy in the European Union," CESifo Working Paper Series 1083, CESifo.
    24. Matsusaka, John G, 1995. "Fiscal Effects of the Voter Initiative: Evidence from the Last 30 Years," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 587-623, June.
    25. Feld, Lars P & Kirchgassner, Gebhard, 2001. "Does Direct Democracy Reduce Public Debt? Evidence from Swiss Municipalities," Public Choice, Springer, vol. 109(3-4), pages 347-370, December.
    26. Pommerehne, Werner W., 1978. "Institutional approaches to public expenditure : Empirical evidence from Swiss municipalities," Journal of Public Economics, Elsevier, vol. 9(2), pages 255-280, April.
    27. Matsusaka, John G., 2004. "For the Many or the Few," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226510811, June.
    28. Lupia, Arthur, 1994. "Shortcuts Versus Encyclopedias: Information and Voting Behavior in California Insurance Reform Elections," American Political Science Review, Cambridge University Press, vol. 88(1), pages 63-76, March.
    29. Fischer, Justina AV, 2009. "Development of Direct Democracy in Swiss Cantons between 1997 and 2003," MPRA Paper 16140, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Lars P. Feld & Christoph A. Schaltegger, 2004. "Do Large Cabinets Favor Large Governments? Evidence from Swiss Sub-federal Jurisdictions," Marburg Working Papers on Economics 200421, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Lars P. Feld & Bruno S. Frey, 2002. "Trust breeds trust: How taxpayers are treated," Economics of Governance, Springer, vol. 3(2), pages 87-99, July.
    3. Christoph A. Schaltegger & Lars P. Feld, 2001. "On Government Centralization and Budget Referendums: Evidence from Switzerland," CESifo Working Paper Series 615, CESifo.
    4. 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).
    5. Bruno S. Frey & Alois Stutzer, "undated". "The Role of Direct Democracy and Federalism in Local Power," IEW - Working Papers 209, Institute for Empirical Research in Economics - University of Zurich.
    6. Mark Schelker & Reiner Eichenberger, 2003. "Starke Rechnungsprüfungskommissionen: Wichtiger als direkte Demokratie und Föderalismus? Ein erster Blick auf die Daten," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(III), pages 351-373, September.
    7. Bruno S. Frey & Marcel Kucher & Alois Stutzer, "undated". "Outcome, Process & Power in Direct Democracy," IEW - Working Papers 025, Institute for Empirical Research in Economics - University of Zurich.
    8. Gebhard Kirchgässner, 2002. "Auswirkungen der direkten Demokratie auf die öffentlichen Finanzen: Empirische Ergebnisse für die Schweiz," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 138(IV), pages 411-426, December.
    9. Bruno S. Frey & Alois Stutzer, 2001. "Beyond Bentham – Measuring Procedural Utility," CESifo Working Paper Series 492, CESifo.
    10. Bruno Frey & Alois Stutzer, 2006. "Strengthening the citizens' role in international organizations," The Review of International Organizations, Springer, vol. 1(1), pages 27-43, March.

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    More about this item

    Keywords

    Democracy; Information; Human Rights; Political Reforms; Switzerland; United States;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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