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using different data sets. If, however, the willingness to pay taxes is the higher the more satisfied citi-
zens are with public services supplied, then these results are evidence for a higher satisfaction of citi-
zens and, therefore, for greater efficiency of the provision of public services. Indeed, Frey and
Stutzer (2000, 2002) present evidence that people in Switzerland perceive themselves as more satis-
fied with their life as a whole in direct democratic cantons keeping income levels and other controls
constant. These results are evidence for the stronger link between tax prices and public services in
direct democracy. They indicate as well that Swiss citizens feel more responsible for their commu-
nity. They might be more willing to accept decisions that lead to an income or wealth loss for them-
selves than citizens of representative democracies.
These studies lend support for the hypothesis that direct democratic systems are more efficient than
representative democratic ones. A more efficient political system should also lead to better economic
performance. Feld and Savioz (1997) study the relationship between budgetary referenda and eco-
nomic performance of Swiss cantons measured by GDP per employee. In a panel with annual data
from 1984 to 1993 for the 26 Swiss cantons, they arrive at the conclusion that GDP per employee is
- ceteris paribus - by about 5 percent higher in those cantons with budgetary referenda compared to
cantons without those referenda. Again there is corroborating evidence from Freitag and Vatter
(2000) for Switzerland and by Blomberg and Hess (2002) for the U.S. states. All in all, the empirical
evidence from the U.S. and Switzerland supports the hypothesis that (economic) policy outcomes in
jurisdictions with referenda and initiatives are more closely orientated at the Wicksellian connection
of spending and tax prices. Given this evidence, much is really speaking for the introduction of direct
democracy in the future EU constitution.
3 A Mandatory Referendum on the European Constitution
Given the success of referenda and initiatives in the U.S. and Switzerland and the necessity to have a
constitutional referendum at the EU level in order to control the rules of the political game, we there-
fore propose to include a mandatory constitutional referendum for the EU Constitution. This pro-
posal contains two components: First, the basic document, the founding treaty that will be the EU
constitution, must be adopted in a mandatory referendum. Second, future changes of the EU consti-
tution have to be finally adopted by the European citizenry in a mandatory referendum as well. These
referenda should be binding and required. The EU institutions involved in the decisions on the EU
Constitution, the Commission, the Council and the EP, cannot abrogate or overrule the referendum
decision other than proposing a new amendment to the constitution (second case) or proposing a
new constitution draft (first case). The EU citizenry empowered to decide on EU constitutional issues
is as defined in Art. 5 of the first part in the current draft constitution as of 28 October 2002.
Both constitutional referenda, the first founding referendum and the second referendum on constitu-
tional changes, are adopted if a simple majority of citizens and a qualified (two thirds) majority of
countries accept the constitution or the constitutional amendment, respectively. Like Frey (1995),
Schneider (1996), Epiney (1997) and Papadopoulos (2002), we thus also propose a ‘double’ ma-