Voter turnout and the Size of GoVernment

Topics: Elections, Voter turnout, Election Pages: 40 (9511 words) Published: January 18, 2014
Uppsala Center for Fiscal Studies
Department of Economics

Working Paper 2013:14

Voter Turnout and the Size of Government
Linuz Aggeborn

Uppsala Center for Fiscal Studies
Working paper 2013:14
Department of Economics
November 2013
Uppsala University
P.O. Box 513
SE-751 20 Uppsala
Sweden
Fax: +46 18 471 14 78

Voter Turnout and the Size of Government
Linuz Aggeborn

Papers in the Working Paper Series are published on internet in PDF formats. Download from http://ucfs.nek.uu.se/

Voter Turnout and the Size of Government



Linuz Aggeborn†
November 4, 2013

Abstract
This paper investigates the causal link between voter turnout and policy outcomes related to the size of government. Tax rate and public expenditures are the focal policy outcomes in this study. To capture the causal mechanism, Swedish and Finnish municipal data are used and a constitutional change in Sweden in 1970 is applied as an instrument for voter turnout in local elections. In 1970, Sweden moved from having separate election days for different levels of government, among other things, to a system with a single election day for political elections, thus reducing the cost associated with voting. This constitutional reform increased voter turnout in local elections in Sweden. The overall conclusion of this paper is that higher voter turnout yields higher municipal taxes and larger local public expenditures. Second, there is some evidence that higher turnout decreases the vote share for right-wing parties.

Key-words: Voter Turnout, Size of government, Sweden, Finland, Local public finance, Instrumental variable regression

JEL Classification Codes: D72 D70 H39



I would like to thank Eva M¨rk and Mikael Elinder for many valuable comments. I o
would also like to thank Antti Moisio, Janne Tukiainen and the rest of the faculty at the Government Institute for Economic Research (VATT) in Helsinki where I collected the statistics for the Finnish municipalities. Furthermore I would like to express gratitude to ¨

Mattias Ohman, Riikka Savolainen, Alex Solis, Erik W˚
angmar, Agnese Sacchi and participants at the 2013 IIPF conference in Taormina (Sicily) as well as seminar participants at Uppsala University. An earlier version of this paper circulated under the title ”The consequences of voter turnout”


Department of Economics, Uppsala University. Uppsala Center for Fiscal Studies; Box 513, 751 20 Uppsala, Sweden. E-mail: linuz.aggeborn@nek.uu.se

1

Introduction

A number of democratic countries have experienced a fall in voter turnout rates since the end of the Second World War.1 Understanding the reason for this decline has been a major research question within the social sciences; voter turnout is considered by some to be important in order to sustain the legitimacy of the democratic process (Lijphart, 1997, p. 1-2). Certainly, there exist several normative arguments as to the importance of voter participation, as well as arguments reflecting a more skeptical stand regarding the value of high turnout rate.2 Nevertheless, voting is not only an isolated political action linked to the issue of democratic legitimacy but also, at least in theory, the basis for the formation of public policy. The purpose of this paper is to investigate the latter by taking a more positive approach that examines the causal effect of a variation in voter turnout on public policy. This paper is especially focused on policy outcomes related to the size of government, such as tax rates and public expenditures.

There is an ongoing discussion within the fields of political science and political economics over whether certain parties are favored when voter turnout declines.3 The focus in this case is whether a decline in voter turnout results in unequal representation. Regarding the actual effect on policy outcomes, there are two potential mechanisms through which turnout may affect policy. First, a drop in voter...
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