Democracy, Redistribution, and Political Participation: Evidence from Sweden 1919-1950

• 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.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

income redistribution

forms of government

representative democracy

Economics

Nationalekonomi

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