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Endogenous Constitutions

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  • Ticchi, Davide

    ()
    (Department of Economics, University of Urbino and University Pompeu Fabra)

  • Vindigni, Andrea

    (Institute for International Economic Studies, Stockholm University)

Abstract

We present a theory of the choice of alternative democratic constitutions, a majoritarian or a consensual one, in a n unequal society. A majoritarian democracy redistributes resources from the collectivity toward relatively few people, and has a relatively small government and low level of taxation. A consensual democracy redistributes resources toward a broader spectrum of social groups but also have a larger government and a higher level of taxation. A consensual system turns out to be preferred by the society when ex ante income inequality is relatively low, while a majoritarian system is chosen when income inequality is relatively high. Moreover, we obtain that consensual democracies should be expected to be ruled more often by center-left coalitions. Finally, our model also provides a new rationale, based on the endogeneity of the political system, of the positive or absent (rather than negative) association between equality and redistribution transpiring from the cross-sectional evidence of developed countries presented in some recent studies. Some historical and empirical evidence supporting our results is provided.

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Bibliographic Info

Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 726.

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Length: 96 pages
Date of creation: 01 Nov 2003
Date of revision:
Publication status: Published in Economic Journal, 2010, pages 1-39.
Handle: RePEc:hhs:iiessp:0726

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Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Phone: +46-8-162000
Fax: +46-8-161443
Web page: http://www.iies.su.se/
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Keywords: Endogenous Constitutions; Consensual Democracy; Majoritarian Democracy; Inequality; Heterogeneity; Redistribution;

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