Title:      Direct Democracy and Public Employees

Authors:    John Matsusaka

Entrydate:  2007-05-29 18:51:41

Keywords:   Direct democracy, public employees, initiative,
patronage, interest groups

Abstract:   In the public sector, employment may be inefficiently
high because of patronage, and wages may be inefficiently high
because of the strength of public employee interest groups. This
paper explores whether the initiative process, a direct democracy
institution of growing importance, can control these political
economy problems, as proponents and some research suggests. Based on
a sample of 500+ cities in 2000, I find that when public employees
are allowed to bargain collectively, driving up wages, the initiative
appears to cut wages by about 5 percent but has no measurable effect
on employment. When public employees are not allowed to bargain
collectively and patronage is a problem, initiatives appear to cut
employment but not wages. 

http://polmeth.wustl.edu/retrieve.php?id=694