Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-technical SummaryA growing literature studies the role of political institutions in shaping fiscal outcomes.One of the most important differences in political institutions of established democracies is whether fiscal and economic decisions are made by elected representatives or through direct voting. Popular influence over policy making brings fiscal policy closer to the electorate's preferences. If representatives prefer more spending than voters, then direct democracy will constrain public budgets. If voters prefer more spending than representatives, then spending will be higher in political jurisdictions that allow for more direct democracy.The public choice tradition argues that elected politicians tend to overspend, overtax and to overborrow due to the interests and influence of bureaucrats or special interest groups. Direct democracy may shift power to voters themselves thus alleviating the principle-agent problems. Direct legislation is one mechanism of the fiscal constitution that allows voters to constrain the Leviathan government.In a federal setting, however, local voters may face particular common-pool disincentives. If the funding of municipalities originates from a "common pool" of country-wide and future taxpayers, voters also welcome overspending on local public goods and services. Voter disincentives may even be larger than those of local politicians. The latter are often constrained by the policies of their countrywide parties. This may result in voters' inaction against constraining the Leviathan or even incentivize them to act as a Leviathan themselves against the taxpayers of other jurisdictions. In this case, direct democracy increases spending.The present paper tries to answer empirically which of the two perspectives has validity for Germany. It is the first analysis of the link between direct democracy and fiscal outcomes for Germany, an archetypal cooperative federation. Hence, Germany offers an intriguing case of comparison against the existing Swiss and US evidence.The starting point of the empirical analysis exploits the variance in the use of voter initiatives at the municipal level in the German State of Bavaria. We have information on all initiatives since the introduction of the right of petitioning for referenda in 1995.Using an selection on observables approach, we find a negative instantaneous correlation between referenda activity and municipal budgets. This turns positive with increasing lags.To address the obvious endog...

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-technical SummaryA growing literature studies the role of political institutions in shaping fiscal outcomes.One of the most important differences in political institutions of established democracies is whether fiscal and economic decisions are made by elected representatives or through direct voting. Popular influence over policy making brings fiscal policy closer to the electorate's preferences. If representatives prefer more spending than voters, then direct democracy will constrain public budgets. If voters prefer more spending than representatives, then spending will be higher in political jurisdictions that allow for more direct democracy.The public choice tradition argues that elected politicians tend to overspend, overtax and to overborrow due to the interests and influence of bureaucrats or special interest groups. Direct democracy may shift power to voters themselves thus alleviating the principle-agent problems. Direct legislation is one mechanism of the fiscal constitution that allows voters to constrain the Leviathan government.In a federal setting, however, local voters may face particular common-pool disincentives. If the funding of municipalities originates from a "common pool" of country-wide and future taxpayers, voters also welcome overspending on local public goods and services. Voter disincentives may even be larger than those of local politicians. The latter are often constrained by the policies of their countrywide parties. This may result in voters' inaction against constraining the Leviathan or even incentivize them to act as a Leviathan themselves against the taxpayers of other jurisdictions. In this case, direct democracy increases spending.The present paper tries to answer empirically which of the two perspectives has validity for Germany. It is the first analysis of the link between direct democracy and fiscal outcomes for Germany, an archetypal cooperative federation. Hence, Germany offers an intriguing case of comparison against the existing Swiss and US evidence.The starting point of the empirical analysis exploits the variance in the use of voter initiatives at the municipal level in the German State of Bavaria. We have information on all initiatives since the introduction of the right of petitioning for referenda in 1995.Using an selection on observables approach, we find a negative instantaneous correlation between referenda activity and municipal budgets. This turns positive with increasing lags.To address the obvious endog...

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Contribution to the ProjectThis research paper will deal with a special feasibility aspect of the socio-ecological transition which is the project's overriding interest. The focus is on reform resistance in general and behavioural types of resistance in particular which may pose serious obstacles to the necessary transition. The regional focus is Southern Europe with comparative data for the whole EU. Contact

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