Fiscal Effects of Putting Initiatives on the Ballot: Evidence from the Last 20 Years in the United States

Abstract

This paper investigates both the indirect (i.e. the existence) and the direct effects (i.e. the usage) of direct democracy institutions on major fiscal outcomes across the United States over the 1992-2009 period. Being based on a more recent time span than previous contributions, our work includes detailed information such as the type of institution (i.e. direct or indirect initiative), the voting outcome, and the topics of concern. The main results suggest that States permitting initiatives spend and tax less than those without, confirming some previous findings. However, when initiatives are effectively used, their practice contributes to increase spending among those States allowing them. The intensity of different initiatives also matters for fiscal outcomes as well as the nature of topics involved.