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Democracy, Redistribution, and Political Participation: Evidence from Sweden 1919-1950
Stockholm University, Faculty of Social Sciences, Department of Economics.
Stockholm University, Faculty of Social Sciences, Department of Economics.
2010 (English)Conference paper (Other academic)
Abstract [en]

In this paper we empirically analyze how different forms of democracy affect redistributive

spending programs, the size of government and political participation. Specifically, we

compare a representative democracy with direct democracy, i.e., town-meeting, using a very

large data set on Swedish local government for the period 1919-1950. Due to the Swedish

Local Government Act, we can implement two different design-based strategies: a

regression-discontinuity design and a nonparametric instrumental variables approach. Our

results indicate that going from a direct democracy to a representative system dramatically

increases political participation, redistributive spending, and the size of government. The

estimated effects on public spending to the poor (poverty relief, child welfare and basic

public education) are on the order of 35-70 percent while the effect on political participation

is between 150-200 percent. We argue that these results most likely reflect that direct

democracy is more prone to capture by (rich) local elites than representative democracy. We

present further evidence that supports the theoretical framework developed by Acemoglu and

Robinson (2006, 2008) based on the persistence of de facto political power.

Place, publisher, year, edition, pages
2010. 1-59 p.
Keyword [en]
income redistribution, forms of government, representative democracy
National Category
URN: urn:nbn:se:su:diva-53684OAI: diva2:391123
The Tenth World Congress of the Econometric Society, Shanghai
Available from: 2011-01-24 Created: 2011-01-24 Last updated: 2011-04-27Bibliographically approved

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Hinnerich, Björn Tyrefors
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ReferencesLink to record
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