Wähler, Interessengruppen und Finanzausgleich: Die Politische Ökonomie vertikaler Finanztransfers
Voters, Interest Groups and Grants: The Political Economy of Vertical Fiscal Equalization

Lars P. Feld and Christoph A. Schaltegger

Recent empirical literature shows that the determination of intergovernmental grants is strongly influenced by the political bargaining power of the recipient states. In particular state politicians and interest groups shift the financial burden of locally concentrated spending projects to the federal government. In this paper, we provide evidence for Swiss cantons that fiscal referendums induce significantly lower matching grants from the central government. The state bureaucracy and union density however increase the size of matching grants. In addition, fiscal referendums reduce the impact of the state bureaucracy. If referendums are available voters serve as a hard budget constraint.

JEL classification: D7, D72, H77

Konjunkturpolitik, Volume 48, 2002, No. 2, pp. 93-122

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