Direct Democracy and Public Policy

Author(s):  
John Matsusaka

An extensive literature seeks to measure the effect of the initiative and referendum on public policies. Several conclusions emerge: The initiative and referendum have different effects on policy. Requiring popular approval of fiscal policies (mandatory referendums) results in lower expenditure, taxes, and debt. The initiative process gives voters more power and results in policies closer to the median voter preference; this often has reduced spending (American states, Swiss cantons), but sometimes has increased spending (cities). The initiative is associated with more socially conservative policy choices. Spurious correlation is a concern in many studies, and more research on causality is needed.

2005 ◽  
Vol 5 (4) ◽  
pp. 327-355 ◽  
Author(s):  
Melissa J. Marschall ◽  
Anirudh V.S. Ruhil

Several recent studies have investigated the relationship between direct democracy and public policy outcomes, with mixed findings. These inconsistencies may stem, in part, from researchers' failure to recognize that direct democracy institutions are distributed nonrandomly across the American states. That is, certain factors may lead a state to adopt the initiative process and influence other policy choices. We revisit the question of how the initiative influences state fiscal policy using panel data from 1960–2000 and a full-information maximum likelihood estimator that explicitly accounts for the endogeneity of the initiative. Our findings suggest that failure to endogenize the initiative in empirical analyses leads to substantially biased estimates of its effects. In particular, we find that once factors that predict whether a state has adopted the initiative are controlled, the initiative has a positive effect on state revenue generation and spending.


Author(s):  
Shaun Bowler ◽  
Todd Donovan

In this article, the authors assess the relationships between opinion, public policy, and state-level direct democracy. They argue that despite assumptions about dramatic effects of direct democracy on state policy, evidence on the matter is mixed and we know relatively little about how popular initiatives translate public opinion into policies. They examine the citizen initiative process in the context of the broader study of cross-state variation in policy and consider how initiatives might make policy more responsive to public opinion. Additionally, the authors evaluate the two-way relationship between state initiatives and national politics and how federal courts may constrain the initiative’s ability to shape policy. Directions for future research are explored in the conclusion.


2019 ◽  
Vol 19 (4) ◽  
Author(s):  
Michele G. Giuranno ◽  
Rongili Biswas

Abstract This paper studies the relation between internal migration and public spending on public goods. We describe centralized public policy when a central government is comprised of elected representatives from local electoral districts. Internal migration determines the median voter in the districts. The median voters decide the equilibrium policy through bargaining. We find the conditions under which voters’ mobility results in larger or smaller public spending. Furthermore, the distance between the actual size and the efficient size of government spending depends on the way internal migration changes the distribution of income within and between districts.


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