The Cabals of a Few or the Confusion of a Multitude: The Institutional Trade-Off between Representation and Governance
AbstractOur model illustrates how political institutions trade off between the competing goals of representation and governance, where governance is the responsiveness of an institution to a single pivotal voter. We use exogenous variation from the 30-year history of the federal Community Development Block Grant program to identify this trade-off. Cities with more representative governments—those with larger city councils—use more grant funds to supplement city revenues rather than implementing tax cuts, thereby moving policy further away from the governance ideal. In sum, more representative government is not without cost. (JEL D72, H71, R50)
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Journal: Economic Policy.
Volume (Year): 3 (2011)
Issue (Month): 1 (February)
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
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