Series: Working Papers. 1709.
Author: Carlos Sanz.
Quantitative methods
- Population and ageing
- Legislation
- Public policy assessment
Published in: Political Science Research and Methods. Volume 8, Issue 4, October 2020, Pages 630-645.
Full document
Abstract
Direct democracy is spreading across the world, but little is known about its effects on policy. I provide evidence from a unique scenario. In Spain, national law determines that municipalities follow either direct or representative democracy, depending on their population. Regression discontinuity estimates indicate that direct democracy leads to smaller government, reducing public spending by around 8%. Public revenue decreases by a similar amount and, therefore, there is no effect on budget deficits. These findings can be explained by a model in which direct democracy allows voters to enforce lower special interest spending.