Direct vs Representative Democracy: Local Elite Capture vs Poverty Relief, Child Welfare and Basic Public Education

“How do we explain our findings that redistributive spending that mainly benefits the poor is significantly larger in representative democracy than in direct democracy? We argue that the most likely explanation is that direct democracy is more prone to capture by (rich) local elites than representative democracy.4 In direct democracy, local elites are able to deter the entry of political parties, in particular pro-poor left-wing parties. Moreover, poor people are often relatively isolated and less organized collectively. These reasons thus make it very hard for the voices of the poor to be heard (Robinson 2010). In addition, the typical absence of a secret ballot in town meetings means that the local elite can control the voters (Baland and Robinson 2008) (Hinnerich and Pettersson-Lidbom 2010-10-20).”

Representative democracy “increases political participation, redistributive spending, and the size of government. The estimated effects on public spending to the poor (poverty relief, child welfare and basic public education) are on the order of 35-70 percent while the effect on political participation is between 150-200 percent (Hinnerich and Pettersson-Lidbom 2010-10-20).”

Direct democracy “is more prone to capture by (rich) local elites than representative democracy (Hinnerich and Pettersson-Lidbom 2010-10-20).”

Hinnerich, Björn Tyrefors; Pettersson-Lidbom, Per. 2010-10-20. “Democracy, Redistribution, and Political Participation: Evidence from Sweden 1919-1950.”

(Hinnerich and Pettersson-Lidbom 2010-10-20)