In the last decades a number of countries in the developed world have experienced a drop in voter turnout. The public sector is in the end run by politicians who are elected by the people and for that reason it is interesting to study how a variation in turnout will affect public policy outcome. The purpose of this master’s thesis is to investigate the potential causal link that runs between voting system, turnout and policy by empirically testing the Meltzer & Richard’s theory from 1981. I use Swedish and Finnish municipal panel data and apply IV-regression. The constitutional change in 1970 when Sweden changed from having separate election days for the central and the local governments into having one joint election day, is used as instrument for turnout. I find that an increased turnout rate also leads to higher local tax rate indicating that turnout actually has an impact on policy outcome.