DIRECT DEMOCRACY AND 2017 GOVERNMENT SIZE: EVIDENCE FROM SPAIN Carlos Sanz Documentos de Trabajo N.º 1709 DIRECT DEMOCRACY AND GOVERNMENT SIZE: EVIDENCE FROM SPAIN DIRECT DEMOCRACY AND GOVERNMENT SIZE: EVIDENCE FROM SPAIN (*) Carlos Sanz (**) BANCO DE ESPAÑA (*) A previous version of this paper covered a more limited sample period (2002-2011). I am thankful to Manuel Bagüés for sharing the budget data for the entire period in which the 100-inhabitant threshold separated the two systems (1987-2011). (**) E-mail address:
[email protected]. Full postal address: C/ Alcalá 48, 28014 Madrid, Spain. I gratefully acknowledge financial support from the Princeton Research Program in Political Economy. I am very thankful to Thomas Fujiwara for his guidance and support. I thank Alfonso Gordaliza for numerous conversations and detailed information on the direct-democracy system, José Miguel Rodríguez for his help in managing and understanding the data, and Samuel Suskind for outstanding research assistance. I also thank Jorge Álvarez, Marco Battaglini, Angus Deaton, Bo Honoré, Federico Huneeus, Matias Iaryczower, John Klopfer, Ilyana Kuziemko, John Londregan, Fernanda Márquez-Padilla, Eduardo Morales, Thomas Romer, Tom Vogl, and seminar participants in Princeton University, the Spanish Economic Association Symposium, Universidad Carlos III de Madrid, Banco de España, Universitat de Barcelona, CaixaBank Research, and the Royal Economic Society Conference for their comments and suggestions. I am solely responsible for any remaining errors. Documentos de Trabajo. N.º 1709 2017 The Working Paper Series seeks to disseminate original research in economics and fi nance. All papers have been anonymously refereed. By publishing these papers, the Banco de España aims to contribute to economic analysis and, in particular, to knowledge of the Spanish economy and its international environment.