Bundling and the Unanimity Rule
AbstractIn this Paper, we design democratic constitutions that can transcend the shortcomings of the unanimity rule. The constitution embeds the unanimity rule in a set of virtue-supporting principles: (a) broad packages with many public projects (bundling) are allowed, but can only be proposed once in a legislative term; (b) the person who designs the package is also taxed at the highest proposed rate; and (c) subsidies are forbidden. We show that such democratic constitutions can yield efficient public project provision.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4808.
Date of creation: Dec 2004
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- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- H40 - Public Economics - - Publicly Provided Goods - - - General
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- Erik Berglöf & Mike Burkart & Guido Friebel & Elena Paltseva, 2009.
"Club-in-the-Club: Reform under Unanimity,"
EPRU Working Paper Series
2009-07, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
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