The Impact of Direct Democracy on Society - Universität St.Gallen
The Impact of Direct Democracy on Society - Universität St.Gallen
The Impact of Direct Democracy on Society - Universität St.Gallen
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– 223 –With respect to the cant<strong>on</strong>al predictors, a similar pattern to the OLS results <str<strong>on</strong>g>of</str<strong>on</strong>g> the structuralmodel is observed. Moreover, the results are also similar to those obtained in the reducedmodel that show the input factors at the school level to be quite uncorrelated with thesociodemographic determinants at the cant<strong>on</strong>al level. As in the reduced model, thec<strong>on</strong>vincingly significant coefficients are those for the share <str<strong>on</strong>g>of</str<strong>on</strong>g> Protestants, the logarithm <str<strong>on</strong>g>of</str<strong>on</strong>g>the cant<strong>on</strong>al populati<strong>on</strong>, and the share <str<strong>on</strong>g>of</str<strong>on</strong>g> poor people, with the latter experiencing a decline insignificance from the 0.1% level in the reduced model down to the 5% or 10% level in thestructural model for almost the entire distributi<strong>on</strong>. This finding indicates that the str<strong>on</strong>gnegative impact <str<strong>on</strong>g>of</str<strong>on</strong>g> poor pers<strong>on</strong>s observed in the reduced model must occur through thecant<strong>on</strong>al budget transmissi<strong>on</strong> channel, probably because politicians face a trade-<str<strong>on</strong>g>of</str<strong>on</strong>g>f betweensupporting needy pers<strong>on</strong>s and financing cant<strong>on</strong>al educati<strong>on</strong>. <str<strong>on</strong>g>The</str<strong>on</strong>g> identical observati<strong>on</strong> holdstrue for the cant<strong>on</strong>al populati<strong>on</strong>, which was str<strong>on</strong>gly significant in the reduced model but lostc<strong>on</strong>siderable significance in the structural model, particularly for the lower and middlequantiles. This finding can again be interpreted to mean that the impact <str<strong>on</strong>g>of</str<strong>on</strong>g> the cant<strong>on</strong>al sizefor lower and middle quantiles obviously occurs through financial channels related to schoolexpenditure. In c<strong>on</strong>trast, for the higher quantiles, a different transmissi<strong>on</strong> channel seems to beat work for this effect not filtered out in the model specificati<strong>on</strong>.Several robustness checks assess whether the observed influence <str<strong>on</strong>g>of</str<strong>on</strong>g> direct democraticinstituti<strong>on</strong>s in both forms depends <strong>on</strong> the inclusi<strong>on</strong> or exclusi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> particular c<strong>on</strong>trols or issensitive to a potentially unsolved endogeneity problem. In general, the results <str<strong>on</strong>g>of</str<strong>on</strong>g> the originalmodel specificati<strong>on</strong> are insensitive to slight variati<strong>on</strong>s in the specificati<strong>on</strong>, but the exclusi<strong>on</strong><str<strong>on</strong>g>of</str<strong>on</strong>g> peer effects appears to cause an omitted variable bias. In additi<strong>on</strong>, imputati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> the medianand admissi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> class sizes <str<strong>on</strong>g>of</str<strong>on</strong>g> ten or more students, which increases the number <str<strong>on</strong>g>of</str<strong>on</strong>g>observati<strong>on</strong>s to roughly 9,000, do not alter the main findings. In the reduced form, directdemocracy again shows a performance lowering effect, which disappears in the structuralform.5 Estimati<strong>on</strong> Results for Mathematics and Natural Science<str<strong>on</strong>g>The</str<strong>on</strong>g> reduced and structural forms are also tested for mathematics and natural science usingboth OLS and quantile regressi<strong>on</strong> methods. <str<strong>on</strong>g>The</str<strong>on</strong>g> measure <str<strong>on</strong>g>of</str<strong>on</strong>g> peer performance, thequalificati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> teachers, and the shortage <str<strong>on</strong>g>of</str<strong>on</strong>g> teachers are also adjusted according to the twosubjects taught. In additi<strong>on</strong>, classes with less than 20 students are eliminated <strong>on</strong> the basis <str<strong>on</strong>g>of</str<strong>on</strong>g>