TY - JOUR
T1 - Political resource allocation
T2 - Benefits and costs of voter initiatives
AU - Matsusaka, John G.
AU - McCarty, Nolan M.
N1 - Funding Information:
We received helpful suggestions from Mark Crain, Dennis Epple, Lars Feld, Elisabeth Gerber, Thomas Gilligan, Arthur Lupia, Mathew McCubbins (editor), Eric Talley, anonymous referees, and workshop participants at Princeton, Stanford, University of Chicago, University of Kentucky, and University of Southern California. Financial support was provided by the Earhart Foundation and the Stigler Center at the University of Chicago.
PY - 2001/10
Y1 - 2001/10
N2 - This article explores the benefits and costs of the voter initiative, a direct democracy device that allows policy decisions to be made by voters rather than their elected representatives. Previous research suggests that by introducing "competition" into the proposal process, the initiative leads to policies that are closer to the median voter's ideal point. In our model, in contrast, the effect of the initiative is conditional on the severity of representative agency problems and uncertainty about voter preferences. The initiative always makes the voter better off when representatives are faithful agents, but when voter preferences are uncertain, initiatives can cause "shirking" representatives to choose policies farther from the voter's ideal point. Our evidence shows that initiatives are more common in states with heterogeneous populations, and initiatives reduce state spending when Democrats control the government and when citizens have diverse preferences.
AB - This article explores the benefits and costs of the voter initiative, a direct democracy device that allows policy decisions to be made by voters rather than their elected representatives. Previous research suggests that by introducing "competition" into the proposal process, the initiative leads to policies that are closer to the median voter's ideal point. In our model, in contrast, the effect of the initiative is conditional on the severity of representative agency problems and uncertainty about voter preferences. The initiative always makes the voter better off when representatives are faithful agents, but when voter preferences are uncertain, initiatives can cause "shirking" representatives to choose policies farther from the voter's ideal point. Our evidence shows that initiatives are more common in states with heterogeneous populations, and initiatives reduce state spending when Democrats control the government and when citizens have diverse preferences.
UR - http://www.scopus.com/inward/record.url?scp=0035613016&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0035613016&partnerID=8YFLogxK
U2 - 10.1093/jleo/17.2.413
DO - 10.1093/jleo/17.2.413
M3 - Article
AN - SCOPUS:0035613016
SN - 8756-6222
VL - 17
SP - 413
EP - 448
JO - Journal of Law, Economics, and Organization
JF - Journal of Law, Economics, and Organization
IS - 2
ER -