Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75978
Authors: 
Schaltegger, Christoph A.
Feld, Lars P.
Year of Publication: 
2001
Series/Report no.: 
CESifo Working Paper 615
Abstract: 
Previous theoretical and empirical research has shown that policymakers have an incentive to centralize government activities in order to weaken the com-petitive pressure of fiscal federalism. We propose and test a positive model of fiscal federalism in which centralization is less likely to occur where budget referendums are possible. The reason for this result is that budget referendums reduce the extent to which pro-centralization regions can commit to a low level of spending delegating the centralization choice to elected poli-cymakers. In addition, it reduces the ability of higher level policy-makers to attract additional responsibilities in order to gain policy discretion. Empi-rical findings from a panel data analysis for Swiss cantons from 1980 to 1998 support this hypothesis.
Subjects: 
centralization
fiscal federalism
budget referendums
JEL: 
D72
H10
H70
Document Type: 
Working Paper

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