Direct Democracy and Local Public Finances under Cooperative Federalism

In this paper, we exploit the introduction of the right of local initiatives in the German state of Bavaria in 1995 in order to study the fiscal effects of direct democracy. Our identification strategy combines difference‐in‐differences and regression discontinuity methods: we compare municipal expenditure and revenue between pre‐ and post‐reform periods at population thresholds where the signatures needed to launch initiatives and minimum quorum requirements decrease discontinuously (difference‐in‐discontinuities design). The results suggest that stronger direct democratic institutions lead to an expansion of local government size.     

Privatisation and corruption in historical perspective: The case of secularisation in Bavaria and Prussia in the early nineteenth century

Abstract

The article deals with privatisation and the valuation of such processes in Germany around 1800. Therefore, it focuses on a topic that has rarely been studied by historians for any time period, although the phenomenon was widespread in the past. The author argues that secularisation in 1803–1810 can be seen as an important privatisation process, because it included large transfers of former church property into private hands. Furthermore, he shows that a new generation of officials benefited from this process, although they had denounced comparable practices as corruption in the previous decades. They could easily justify such advantageous transfers publicly with their self-perception as an administrative and entrepreneurial elite. However, contemporaries publicly accused their actions and the secularisation itself of being corrupt. The author shows that privatisation was already a publicly discussed issue in the nineteenth century and needed to be justified. A history of privatisation, as the author finally states, allows insights into contemporaneous concepts of markets, state and welfare, and their effect in the respective time period.