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Democratic Mechanisms

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  • Hans Gersbach

Abstract

We introduce democratic mechanisms as a set of rules that must obey liberal democracy's fundamental principles of equal voting and agenda rights. We show that an appropriate combination of three rules may yield efficient provision of public projects: first, flexible and double majority rules, where the size of the majority depends on the proposal, and taxed and non-taxed individuals need to support the proposal; second, flexible agenda costs, where the agenda-setter has to pay a certain amount of money if his proposal does not generate enough supporting votes; third, a ban on subsidies. We highlight that universal equal treatment with regard to taxation is undesirable. Finally, we illustrate how simple constitutions involving fixed super majority rules yield socially desirable outcomes if the agenda-setter is benevolent. (JEL: D62, D72, H40) (c) 2009 by the European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 7 (2009)
Issue (Month): 6 (December)
Pages: 1436-1469

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Handle: RePEc:tpr:jeurec:v:7:y:2009:i:6:p:1436-1469

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Cited by:
  1. Becker, Johannes Gerd & Gersbach, Hans & Grimm, Oliver, 2010. "Debt-sensitive Majority Rules," CEPR Discussion Papers 7860, C.E.P.R. Discussion Papers.
  2. Emmanuelle Auriol & Robert J. Gary-Bobo, 1998. "On the Optimal Number of Representatives," Discussion Papers 1286, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. Hans Gersbach, 2011. "On the limits of democracy," Social Choice and Welfare, Springer, vol. 37(2), pages 201-217, July.
  4. Hans Gersbach & Volker Hahn & Stephan Imhof, 2013. "Tax rules," Social Choice and Welfare, Springer, vol. 41(1), pages 19-42, June.
  5. Johannes Gerd Becker, 2011. "On the Number of alpha-Pivotal Players," CER-ETH Economics working paper series 11/142, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  6. Hans Gersbach & Oriol Tejada, 2012. "Channeling the final Say in Politics," CER-ETH Economics working paper series 12/164, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  7. Toke Aidt & Francesco Giovannoni, 2011. "Critical decisions and constitutional rules," Social Choice and Welfare, Springer, vol. 37(2), pages 219-268, July.
  8. Hans Gersbach & Lars-H. Siemers, 2014. "Can democracy induce development? A constitutional perspective," Public Choice, Springer, vol. 159(1), pages 177-196, April.
  9. Sahm, Marco, 2006. "Essays in Public Economic Theory," Munich Dissertations in Economics 5633, University of Munich, Department of Economics.
  10. Hans Gersbach, 2010. "Democratic Provision of Divisible Public Goods," CESifo Working Paper Series 2939, CESifo Group Munich.

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