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Democratic Public Good Provision

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  • Hassler, John
  • Storesletten, Kjetil
  • Zilibotti, Fabrizio

Abstract

This Paper analyses an overlapping generation model of public good provision under repeated voting. The public good is financed through age-dependent taxation that distorts human capital investment. Taxes redistribute income both across different skill groups and across generations. We contrast the political equilibria with the Ramsey allocation, and analyse the sources of inefficiency. The political equilibria can feature both under- and over-provision of public good, as well an inefficient life-cycle profile of taxes.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4044.

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Date of creation: Sep 2003
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Handle: RePEc:cpr:ceprdp:4044

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Keywords: markov equilibrium; multiple equilibria; political economy; public good; ramsey allocation; taxation;

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References

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  8. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 2001. "The survival of the welfare state," Economics Working Papers 603, Department of Economics and Business, Universitat Pompeu Fabra.
  9. Alessandro Lizzeri & Nicola Persico, . ""The Provision of Public Goods Under Alternative Electoral Incentives''," CARESS Working Papres, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences 98-08, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
  10. Alesina, Alberto & Tabellini, Guido, 1990. "A Positive Theory of Fiscal Deficits and Government Debt," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 57(3), pages 403-14, July.
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  13. Hassler, John & Krusell, Per & Storesletten, Kjetil & Zilibotti, Fabrizio, 2005. "The dynamics of government," Journal of Monetary Economics, Elsevier, Elsevier, vol. 52(7), pages 1331-1358, October.
  14. Tabellini, Guido, 1991. "The Politics of Intergenerational Redistribution," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(2), pages 335-57, April.
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