The Impact of Direct Democracy on Society - Universität St.Gallen

– 122 –one hand, and electoral competition , on the other hand, reveals a significant positive impact<strong>of</strong> both interaction terms which identifies these institutions as their channels <strong>of</strong> influence(while the coefficients <strong>of</strong> the political institutions themselves remain insignificant). This mayindicate that the positive effect <strong>of</strong> democracy measured in their first paper captures theinfluence <strong>of</strong> the lobbying power <strong>of</strong> senior citizens, which appears to go far beyond their sociodemographicinfluence.Differentiating the dependent variable social welfare in different components, PAMPEL andWILLIAMSON (1988) find among the political determinants a significant positive effect <strong>of</strong>voting participation on social insurance and family allowances, but an insignificant one onpublic assistance. Electoral competition, the measure <strong>of</strong> the power <strong>of</strong> lobbies, proves to bepositive and significant only for social insurance and family allowance. <strong>The</strong> reason could bethat social insurance is a contribution based system; hence, people have to be entitled byfinancial contributions whereas public assistance is given on the basis <strong>of</strong> means-tested needs.In the public assistance regression only unions and unemployment rate have a positive andsignificant coefficient. <strong>The</strong> share <strong>of</strong> the senior population is observed to exert a positive andsignificant impact on social insurance expenses and family allowances, but an insignificantone on public assistance. <strong>The</strong> authors interpret their results as supporting the interest-grouppoliticstheory based on the strong interaction terms between the institutional variables andthe percentage <strong>of</strong> elder residents. Hence, it can be concluded that democratic institutions helpchanneling the demands <strong>of</strong> particular interest groups.Using data for 21 countries covering an extremely long time span from 1880 to 1930 in 10-year-distances, LINDERT (1994) investigates the impact <strong>of</strong> democracy, female suffrage, voterturnout and the frequency <strong>of</strong> executive turnover on total social transfers and its components,welfare and unemployment, pensions and health expenditure. He finds a significant positiveinfluence <strong>of</strong> female suffrage as well as <strong>of</strong> executive turnover on total social transfers. <strong>The</strong>latter is significant and positive for all subcategories <strong>of</strong> social expenditure. Voter participationis positive and highly significant for total social transfers, and particularly for pensions andhealth payments, but not decisive for welfare and unemployment transfers. According to theauthor, the positive influence <strong>of</strong> voter participation can be explained either by the legalextension <strong>of</strong> suffrage also to lower income groups, which favor redistribution, or by the actualintegration <strong>of</strong> social groups favoring progressive taxation and transfer payments into the