Democratic provision of divisible public goods

Arbeitspapier

In this paper we examine the potential of democratic constitutions for the provision of divisible public goods in a large economy. Our main insights are as follows: When aggregate shocks are absent, the combination of the following rules yields first-best allocations: a supermajority rule, equal taxation, exemption of the agenda setter from taxation, and a ban on subsidies. In the presence of aggregate shocks to benefits or to costs of public-good provision, tax-sensitive majority rules, where the size of the required majority depends on the aggregate tax revenues, yield first-best allocations if a monotonicity condition is met. Finally, we explore the potential of first-best constitutions to induce voluntary participation by compensating agents belonging to the minority.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2939

Classification and Topics

• Classification: Wirtschaft ; Externalities ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Publicly Provided Goods: General
• Subject: democratic constitutions ; tax-sensitive majority rules ; constitutional rules ; provision of public goods ; Öffentliches Gut ; Versorgung ; Demokratie ; Abstimmungsregel ; Steuerpolitik ; Verfassungsökonomik ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gersbach, Hans
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/30740
• Last update: 10.03.2025, 11:42 AM CET