The Impact of Direct Democracy on Society - Universität St.Gallen

– 16 –aspect is the critique that citizens in direct democracies have no incentives to make wellinformeddecisions because the costs <strong>of</strong> information gathering are higher than the expectedbenefit (cf. DOWNS, 1957), which is particularly crucial for optional elements <strong>of</strong> directlegislation (see KIRCHGÄSSNER et al., 1999, p.20 and p.47 cont.). 26 Moreover, in an economicmodel, MARINO and MATSUSAKA (2005) show that politicians have an incentive to supplybiased information to the citizenry in a world <strong>of</strong> partial delegation, as takes place in directdemocracies, in order to prevent initiative- or referendum- induced budget cuts. 27 Anotherargument against direct democratic institutions, particularly referenda, is that they slow downthe political decision-making process which makes this political system unable to react fast toeconomic or societal changes (see KIRCHGÄSSNER et al., 1999, p.20). This leads to what iscalled a ‘Status Quo bias’. 28 Moreover, BRETON (1996) suggests that institutions <strong>of</strong> directlegislation prevent gains from logrolling, which implies vote trading, leading to a level <strong>of</strong>provision <strong>of</strong> public goods which is below the societally optimal level 29 . Finally, a relatedaspect is that means <strong>of</strong> direct legislation prevent binding compromises necessary for reachinginternational agreements. 30My own contribution to these societal aspects <strong>of</strong> influences <strong>of</strong> direct democracy will betw<strong>of</strong>old: first, after updating the index <strong>of</strong> direct democracy for the relevant time span, theanalysis will use the new data to reinvestigate the happiness aspect <strong>of</strong> direct democracy; andsecond, the analysis will address some new transmission channels <strong>of</strong> direct democracy’sinfluence on well-being, channels that are different from those mentioned above. Specifically,I will examine the impact <strong>of</strong> direct legislation on the public goods <strong>of</strong> income redistribution,public safety, and education. <strong>The</strong>se empirical analyses will be carried out using Swisscantonal data. <strong>The</strong> next section briefly summarizes why Switzerland is an appropriate countryfor studying such effects.26 A similar argument is that a direct democracy requires a higher level <strong>of</strong> civic engagement than a representativepolitical system, and a rational individual should not be expected to show such a level. For systematic andcasual empirical counter-evidence against both arguments, see KIRCHGÄSSNER et al., 1999, pp. 53-68.27 See also related empirical evidence for the provision <strong>of</strong> public goods in districts with an override option in theUnited States, described in chapter VI.28 For counter-arguments and institutional solutions to this problem at the Swiss federal level (seeKIRCHGÄSSNER et al., 1999, pp. 21 cont.). Particularly initiatives serve to ‘accelerate’ the political process.<strong>The</strong> Status Quo bias might also be positively interpreted as a higher degree <strong>of</strong> continuity and countability inpolicy-making (KIRCHGÄSSNER et al., 1999, p. 24).29 See also footnote 7. <strong>The</strong> paper by BARANKAY (2002) might serve as supportive empirical evidence.30 For counter-arguments, see KIRCHGÄSSNER et al., 1999, p. 33, and the references therein.