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Democratic Mechanisms: Double Majority Rules and Flexible Agenda Costs

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Author Info
Hans Gersbach ()

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Abstract

We introduce democratic mechanisms where individual utilities are not observable by other people at the legislative stage. We show that the combination of three rules can 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 also illustrate that higher dimensional uncertainty about project parameters can make it easier to achieve first-best allocations and that universal equal treatment with regard to taxation is undesirable.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 749.

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Date of creation: 2002
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Handle: RePEc:ces:ceswps:_749

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Related research
Keywords: democratic constitutions; unobservable utilities; double majority rules; flexible agenda cost rules;

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Find related papers by JEL classification:
D62 - Microeconomics - - Welfare Economics - - - Externalities
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
H40 - Public Economics - - Publicly Provided Goods - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Gersbach, Hans & Haller, Hans, 2001. "Collective Decisions and Competitive Markets," Review of Economic Studies, Blackwell Publishing, vol. 68(2), pages 347-68, April.
  2. Ledyard, John O. & Palfrey, Thomas R., 2002. "The approximation of efficient public good mechanisms by simple voting schemes," Journal of Public Economics, Elsevier, vol. 83(2), pages 153-171, February. [Downloadable!] (restricted)
  3. Mookherjee, Dilip & Reichelstein, Stefan, 1992. "Dominant strategy implementation of Bayesian incentive compatible allocation rules," Journal of Economic Theory, Elsevier, vol. 56(2), pages 378-399, April. [Downloadable!] (restricted)
  4. Piketty, Thomas, 1999. "The information-aggregation approach to political institutions," European Economic Review, Elsevier, vol. 43(4-6), pages 791-800, April. [Downloadable!] (restricted)
  5. Ulrich Erlenmaier & Hans Gersbach, 2001. "Flexible Majority Rules," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  6. Mount, Kenneth & Reiter, Stanley, 1974. "The informational size of message spaces," Journal of Economic Theory, Elsevier, vol. 8(2), pages 161-192, June. [Downloadable!] (restricted)
    Other versions:
  7. Harald Uhlig, 1996. "A law of large numbers for large economies (*)," Economic Theory, Springer, vol. 8(1), pages 41-50.
  8. Daniel Berend & Jacob Paroush, 1998. "When is Condorcet's Jury Theorem valid?," Social Choice and Welfare, Springer, vol. 15(4), pages 481-488. [Downloadable!] (restricted)
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  14. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April. [Downloadable!] (restricted)
    Other versions:
  15. Aghion, Philippe & Alesina, Alberto F & Trebbi, Francesco, 2002. "Endogenous Political Institutions," CEPR Discussion Papers 3473, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  16. Mailath, George J & Postlewaite, Andrew, 1990. "Asymmetric Information Bargaining Problems with Many Agents," Review of Economic Studies, Blackwell Publishing, vol. 57(3), pages 351-67, July. [Downloadable!] (restricted)
  17. Al-Najjar, Nabil I. & Smorodinsky, Rann, 2000. "Pivotal Players and the Characterization of Influence," Journal of Economic Theory, Elsevier, vol. 92(2), pages 318-342, June. [Downloadable!] (restricted)
  18. Buchanan, J M, 1998. " Majoritarian Logic," Public Choice, Springer, vol. 97(1-2), pages 13-21, October. [Downloadable!] (restricted)
  19. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63, pages 309. [Downloadable!] (restricted)
  20. Alos-Ferrer, C., 1998. "Individual Randomness in Economic Models with a Continuum Agents," Papers 9807, Washington St. Louis - School of Business and Political Economy.
  21. Feddersen, Timothy J & Pesendorfer, Wolfgang, 1996. "The Swing Voter's Curse," American Economic Review, American Economic Association, vol. 86(3), pages 408-24, June.
    Other versions:
    • Timothy J. Feddersen & Wolfgang Pesendorfer, 1995. "The Swing Voter's Curse," Discussion Papers 1064, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  22. Roger B. Myerson, 1994. "Extended Poisson Games and the Condorcet Jury Theorem," Discussion Papers 1103, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
  23. Caplin, Andrew S & Nalebuff, Barry J, 1988. "On 64%-Majority Rule," Econometrica, Econometric Society, vol. 56(4), pages 787-814, July. [Downloadable!] (restricted)
  24. d'Aspremont, Claude & Gerard-Varet, Louis-Andre, 1979. "Incentives and incomplete information," Journal of Public Economics, Elsevier, vol. 11(1), pages 25-45, February. [Downloadable!] (restricted)
  25. Al-Najjar, Nabil Ibraheem, 1995. "Decomposition and Characterization of Risk with a Continuum of Random Variables," Econometrica, Econometric Society, vol. 63(5), pages 1195-1224, September. [Downloadable!] (restricted)
  26. Timothy Feddersen & Wolfgang Pesendorfer, 1994. "Voting Behavior and Information Aggregation in Elections with Private Information," Discussion Papers 1117, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Aidt, T.S. & Giovannoni,F., 2005. "Critical Decisions and Constitutional Rules," Cambridge Working Papers in Economics 0523, Faculty of Economics, University of Cambridge. [Downloadable!]
  2. Felix Bierbrauer & Marco Sahm, 2008. "Optimal Democratic Mechanisms for Taxation and Public Good Provision," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2008_09, Max Planck Institute for Research on Collective Goods. [Downloadable!]
  3. Francesco Giovannoni & Toke S. Aidt, 2004. "Constitutional Rules," Econometric Society 2004 North American Summer Meetings 540, Econometric Society. [Downloadable!]
    Other versions:
  4. Felix Bierbrauer & Marco Sahm, 2006. "Informative Voting and the Samuelson Rule," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2006_18, Max Planck Institute for Research on Collective Goods. [Downloadable!]
  5. Felix Bierbrauer & Marco Sahm, 2006. "Informative Voting and the Samuelson Rule," Discussion Papers 159, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
  6. Hans Gersbach & Lars Siemers, 2005. "Can Democracy Educate a Society?," IZA Discussion Papers 1693, Institute for the Study of Labor (IZA). [Downloadable!]
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This page was last updated on 2009-11-3.

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