Abstract
Switzerland has experienced extensive institutional reforms at the local level that could influence local debt. These reforms have included municipal mergers, greater inter-communal cooperation, reformed political decision-making mechanisms, and the introduction of new public management measures. Many of these reforms originated at the cantonal level. However, the institutional diversity among Swiss municipalities hardly has diminished. A cross-sectional analysis for the 137 largest Swiss cities and villages in 2004 shows that direct democratic rights and a high degree of fiscal autonomy lead to a lower level of local debt. There is no statistical support for the hypothesis that reforms following the new public management guidelines had an effect on debt levels.
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Feld, L.P., Kirchgässner, G. & Schaltegger, C.A. Municipal debt in Switzerland: new empirical results. Public Choice 149, 49 (2011). https://doi.org/10.1007/s11127-011-9828-5
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DOI: https://doi.org/10.1007/s11127-011-9828-5