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Abstract:

cover
CEP Discussion Paper
Distaste for Centralization: Evidence from a Quasi-Natural Experiment in Switzerland
Sarah Flèche
November 2015
Paper No' CEPDP1383:
Full Paper (pdf)

JEL Classification: H11; H40; I31


Tags: decentralization; life satisfaction; public spending; procedural utility

Do people care about the degree of centralization? This paper examines the effects of local centralization reforms on individuals' well-being using a quasi-natural experiment in Switzerland. The results reveal that centralization has a causal negative impact on individuals' life satisfaction. Consistent with the concept of procedural utility, centralization reduces individuals' feeling of having political influence and interest in politics. In contrast, there are no impacts on individuals' satisfaction with local governments' performance. These findings shed new light on what people value in decentralized institutions.