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Democracy, Redistribution, and Political Participation: Evidence From Sweden 1919–1938
Author(s) -
Hinnerich Björn Tyrefors,
PetterssonLidbom Per
Publication year - 2014
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.3982/ecta9607
Subject(s) - elite , democratization , direct democracy , representative democracy , democracy , redistribution (election) , politics , population , political science , development economics , regression discontinuity design , political economy , economics , sociology , statistics , law , demography , mathematics
In this paper, we compare how two different types of political regimes—direct versus representative democracy—redistribute income toward the relatively poor segments of society after the introduction of universal and equal suffrage. Swedish local governments are used as a testing ground since this setting offers a number of attractive features for a credible impact evaluation. Most importantly, we exploit the existence of a population threshold, which partly determined a local government's choice of democracy to implement a regression‐discontinuity design. The results indicate that direct democracies spend 40–60 percent less on public welfare. Our interpretation is that direct democracy may be more prone to elite capture than representative democracy since the elite's potential to exercise de facto power is likely to be greater in direct democracy after democratization.