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Public Choice by Referenda or Delegation. An Experimental Comparison of Direct and Indirect Democracy

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  • Werner Gueth
  • Martin Kocher
  • Katinka Pantz
  • Matthias Sutter

Abstract

Direct democracy with its use of referenda avoids the prototypical principal-agent problems of delegation in indirect democracies, especially since elected representatives are usually not committed by law to keep their promises. Sequential or more complex referenda may, however, result in an inferior combination of realized policy measures. Thus, it is an open question which type of institution (direct or indirect democracy) will be more efficient. Our experimental study explores this issue and finds that direct democracy seems to perform better.

Suggested Citation

  • Werner Gueth & Martin Kocher & Katinka Pantz & Matthias Sutter, 2004. "Public Choice by Referenda or Delegation. An Experimental Comparison of Direct and Indirect Democracy," Papers on Strategic Interaction 2004-04, Max Planck Institute of Economics, Strategic Interaction Group.
    • Handle: RePEc:esi:discus:2004-04
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    References listed on IDEAS

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    Cited by:

    1. Seebauer, Michael, 2015. "Does direct democracy foster efficient policies? An experimental investigation of costly initiatives," FAU Discussion Papers in Economics 01/2015, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    2. Lars P. Feld, 2007. "Ex Interim Voting: An Experimental Study of Referendums for Public-Good Provision. Comment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 75-80, March.

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    Keywords

    referenda; delegation; experiment;
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