A scientific study shows that when voters decide how public money is spent, governments spend less and better.
It sounds too good to many.
Some will say: “are you kidding? If voters have control over money we will go broke in no time”, “the people will go for flashy projects, they will support all sorts of “prestige” projects that will ruin us!
It is possible that when voters are not used to decide, they are not used to being responsible either. Because of that they may vote for ruinous projects. But soon they will learn. Once they learn, they will not overspend again.
Yes, us, the people, may spend more than than we should, until we learn. But it is a fact most politicians do that already. Not much to lose by trying a new way to spend; let the people decide, it is their money. It is not the politician’s money.
Direct control of public expenses by the people is one of the important tools of direct democracy. But just like one tool does not make a shop, other changes are necessary.
Let us go back to the study. Researchers in California and in Switzerland carried it out. At the end of this post you have the link.
The scientists studied the 26 Swiss Cantons. Swiss cantons are similar in some ways to the states in the US or Australia, Canadian provinces, German Länders, Spanish autonomous regions, etc.
The Swiss cantons are very autonomous. Because of that, the tools of direct democracy are not the same in all cantons.
In some cantons, by law, a referendum must take place if a project exceeds a fixed dollar limit. In other cantons, they hold referendums only if enough people demand it.
If the trigger for a referendum is the cost of a project, Swiss politicians could cheat by dividing a large project into several small ones.
I do not know why they don’t cheat. But that is another issue, although also relevant for direct democracy.
I know of many formal democracies where large project are chopped into several smaller ones to by-pass rules; it is “standard cheat”. They don’t do it to avoid referendums; they do it for other reasons. For example, to award a contract to a friend, or to someone who gives them money under the table, without having to go to public tender.
Swiss direct democracy has two other ways to control public spending.
One is the voluntary referendum. The other one is the citizen initiative.
A voluntary referendum is voluntary because it happens only if people make it happen.
The other instrument is the citizen initiative. The initiative allows citizens to introduce laws to limit public spending.
However, for reducing public spending the mandatory referendum is the key factor.
The researchers found the cantons with mandatory referendums spend 20% less than the cantons without them. This is an important difference.
They report that citizens initiatives help reduce public spending too.
Perhaps you noticed the study looks at California and at Swiss cantons. You heard that California has huge public spending and huge debt, despite having some direct democracy tools.
One important difference between Switzerland and California is that in California there are no mandatory referendums. It also seems odd that most attempts to hold referendums in California do not meet the criteria to do it… Something is not right with the criteria; if we want citizens to decide, we can not make it difficult. If we make it difficult it means we are not really interested.
This may explain why California’s budget is in deep trouble; the people can not control it.
In contrast, the Swiss also have other important direct democracy tools to control spending.
For example, the “debt brake”. It is written in the Swiss constitution that national government expenses have to be mainly financed by revenues and not by debt.
But, whatever the formal provisions, the hard truth is that the key factors in direct democracy are how people think and behave, not what the constitution says. This applies to spending and to everything else.
If a country is not a prosperous and stable representative democracy it usually is because of the way the people think as a group. The first job is to work to improve that. I speak of stable and prosperous representative democracies because they are the only ones capable of making the transition to successful direct democracy.
In other posts we will write about what direct democracy requires. We will write too about values and behaviours that may cause direct democracy to fail.
If direct democracy fails, direct democracy’s credibility will suffer. Many will even say: “direct democracy does not work”.
A stable and prosperous representative democracy will be more so with direct democracy, but direct democracy will not make a country stable and prosperous.
Remember this: In the cantons where by law the voters decide, public spending is 20% lower.
But there is another benefit of direct democracy that can be even more important than control of expenses; direct citizen power keeps citizens engaged. One serious problem in representative democracies is citizen alienation. It weakens democracy.
The study also found that in cantons where they have provisions for the citizens to introduce new laws, they also control expenses better.
If you want to reduce and control public spending, wherever you are, you have to do something. You can do things, little or big, to push for mandatory budget and expenses referendums. You can help that happen in school boards, roads, transportation, big projects, etc., it will be a good start,
By doing that you will also help revitalize democracy.
Your comments are necessary for direct democracy to advance. Thank you.
Here is the link to the study. http://www.iandrinstitute.org/docs/Feld-and-Matsusaka-Fiscal-Evidence-from-Swiss-Cantons-IRI.pdf