Direct Democracy, the Structure of Government and Welfare State Expansion 1930-2000

The existing literature on welfare state development holds a pessimistic view on the role of direct democracy for welfare state generosity. More specifically, the literature argues that referendums constrain the extension of social security spending while pro-welfare initiatives are mostly rejected. In contrast, I argue that the effect of initiatives on welfare state extension is conditional on the political environment. More precisely, I combine insights from the the political economy literature about the structure of the government with comparative welfare state research. Using panel data on social expenditure in the Swiss cantons from 1930 to 2000, I show that initiatives constrain social spending of multiparty governments but expand social spending of single party governments. In addition, I provide case evidence from the Swiss cantons to explore the causal links between initiatives and social expenditure.