Improving health care systems, while containing cost pressures, is a key policy challenge in most OECD countries. The recent economic and financial crisis has weighed heavily on fiscal positions – with gross government debt projected to exceed 100% of GDP in the OECD area by 2011 – and reinforced the need to improve public spending efficiency. Public spending on health care is one of the larges...

Using a new dataset of Swiss cantons from 1890 to 2000, we estimate the causal effect of direct democracy on government spending. Our analysis is novel in two ways: first, we use fixed effects to control for unobserved heterogeneity; second, we combine a new instrument with fixed effects to address the potential endogeneity of institutional reform. We find that direct democracy has a constraini...

We provide a multiperiod model of political competition in which voters imperfectly observe the electoral promises made to other voters. Imperfect observability generates an incentive for candidates to offer excessive transfers even if voters are homogeneous and taxation is distortionary. Government spending is larger than in a world of perfect observability. Transfers are partly financed throu...

This study examines the effect of the composition of federal and state government spending on various important air pollutants in the US using a newly assembled data set of government expenditures. The results indicate that a reallocation of spending from private goods (RME) to social and public goods (PME) by state and local governments reduces air pollution concentrations while the compositio...

We provide a multiperiod model of political competition in which voters imperfectly observe the electoral promises made to other voters. Imperfect observability generates an incentive for candidates to offer excessive transfers even if voters are homogeneous and taxation is distortionary. Government spending is larger than in a world of perfect observability. Transfers are partly financed throu...

Why do voters often reward incumbents when they receive government spending? We develop a model in which distributive spending provides voters not just with a financial benefit, but also an opportunity to observe and judge the appropriateness of government decisions. Empirically, we test the model’s predictions using individuallevel data on FEMA disaster relief matched to voter turnout records,...