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Costs of taxation and the size of government

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  • Jørgen Andersen

Abstract

Existing theory on the form of government suggests that a parliamentary system promotes a larger size of government than does a presidential system. This paper extends the existing theory by allowing for distortionary taxation. A main result is that if taxation is sufficiently distortionary, the parliamentary system may promote a smaller size of government than the presidential system. The proposed mechanism appears consistent with several empirical patterns in the data that cannot be explained by other theories. Copyright Springer Science+Business Media, LLC 2012

Suggested Citation

  • Jørgen Andersen, 2012. "Costs of taxation and the size of government," Public Choice, Springer, vol. 153(1), pages 83-115, October.
    • Handle: RePEc:kap:pubcho:v:153:y:2012:i:1:p:83-115
    DOI: 10.1007/s11127-011-9776-0
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    Cited by:

    1. Facchini, Francois, 2014. "The determinants of public spending: a survey in a methodological perspective," MPRA Paper 53006, University Library of Munich, Germany.
    2. Christian Bredemeier, 2014. "Imperfect information and the Meltzer-Richard hypothesis," Public Choice, Springer, vol. 159(3), pages 561-576, June.

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    More about this item

    Keywords

    Political economy; Constitution; Tax costs; Comparative politics; H3; H4; H5; P51;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H4 - Public Economics - - Publicly Provided Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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