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Democratic Mechanisms: Double Majority Rules and Flexible Agenda Costs

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  • Hans Gersbach

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 e±cient 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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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 749.

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

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

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References

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Cited by:
  1. Bierbrauer, Felix & Sahm, Marco, 2006. "Informative Voting and the Samuelson Rule," Discussion Paper Series of 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 159, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  2. Toke Aidt & Francesco Giovannoni, 2011. "Critical decisions and constitutional rules," Social Choice and Welfare, Springer, Springer, vol. 37(2), pages 219-268, July.
  3. Francesco Giovannoni & Toke S. Aidt, 2004. "Constitutional Rules," Econometric Society 2004 North American Summer Meetings, Econometric Society 540, Econometric Society.
  4. Gersbach, Hans & Siemers, Lars, 2005. "Can Democracy Educate a Society?," IZA Discussion Papers 1693, Institute for the Study of Labor (IZA).
  5. Felix Bierbrauer & Marco Sahm, 2006. "Informative Voting and the Samuelson Rule," Working Paper Series of the Max Planck Institute for Research on Collective Goods, Max Planck Institute for Research on Collective Goods 2006_18, Max Planck Institute for Research on Collective Goods.
  6. Lukach, R. & Plasmans, J.E.J., 2002. "Measuring Knowledge Spillovers using Patent Citations: Evidence from the Belgian Firm's Data," Open Access publications from Tilburg University urn:nbn:nl:ui:12-92281, Tilburg University.
  7. Philippe Aghion & Patrick Bolton, 2003. "Incomplete Social Contracts," Journal of the European Economic Association, MIT Press, MIT Press, vol. 1(1), pages 38-67, 03.
  8. 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, Max Planck Institute for Research on Collective Goods 2008_09, Max Planck Institute for Research on Collective Goods.

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