The political economy of direct legislation: direct democracy and local decision–making

Local and regional governments account for an important share of total government spending and, given the decentralization trend in OECD nations, this is likely to increase. How should this spending be governed? This article argues that direct democracy is best suited to organize decision–making at the state and local level. To support this, we present the main theoretical arguments on why and how referenda and initiatives affect fiscal policy outcomes. The basic argument concerns voter control. Under representative democracy, citizens only have direct control at election time. With referenda and initiatives, citizens can selectively control their representatives on specific policies whenever they deviate sufficiently from citizens' preferences. As a result, fiscal policy outcomes are likely to more closely reflect voter preferences. We empirically test this on Swiss data since Switzerland provides a 'natural laboratory' for local governance. The governance structures of Swiss cantons and localities with respect to fiscal issues range from classic parliamentary democracy to pure direct democracy, and an important part of spending and taxation is controlled at these levels. Specifically, we estimate an econometric model of fiscal behaviour using data from 1986 to 1997 for the 26 Swiss cantons, and 1990 data on 134 local communities. It is shown that mandatory referenda on fiscal issues at both levels have a dampening effect on expenditure and revenue, and at the local level also on public debt. Combining this with existing empirical evidence leads to a relatively uncontested result, namely that elements of direct democracy are associated with sounder public finances, better economic performance and higher satisfaction of citizens.     

The service sector of Cuba: An analysis and critique

The Cuban economy has experienced a significant increase in foreign direct investment over the past decade due to the end of the Soviet Union and the establishment of more liberal trade policies. Although the U.S. embargo of trade with Cuba still exists, there has been movement lately that suggests the end of the four‐decades‐old policy. The purpose of this article is to analyze the current Cuban business environment and to identify potential entrepreneurial opportunities in the service sector. Major trade partners are also reviewed and managerial implications discussed. © 2006 Wiley Periodicals, Inc.     

BEA's Regional Economic Accounts Program: Recent and Planned Improvements

This article highlights recent improvements and plans for further improvements to each of BEA’s major regional economic accounts programs. The improvements focus on the acceleration of release of the estimates and on the preparation of new and extended estimates. There also is a brief discussion on BEA’s research effort to improve the regional accounts.JEL Classification E010     

Human resource management,union voice and the use of discipline: an analysis of WIRS3

Three outcomes of personnel practice (rates of discipline, quitting and absence) are analysed. There was no firm association with measures of practices associated with Human Resource Management. By contrast, unionisation was strongly associated with the low use of discipline and low quit rates: union ‘voice’ remains influential in the 1990s.