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A Theory of Political Competition over Military Policy and Income Redistribution

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Author Info
Naoki Yoshihara
Abstract

We discuss political competition games between Left and Right parties, in which the policy space is two dimensional. One issue is the choice of proportional tax rate, and the second is the allocation of tax revenue between military policies and social welfare policies. On these political issues, the stylized fact is that left-wing parties prefer higher tax rates and lower military expenditure than do right-wing parties. We examine the kinds of political environments in which this fact can be rationalized as the equilibrium outcome of a given political game. By adopting the notion of the party-unanimity Nash equilibrium [Roemer (1998; 1999; 2001; 2005)], not only votersf economic motivations, but also their ideological positions are shown to be crucial factors in explaining stylized party behavior.

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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Discussion Paper Series with number a503.

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Date of creation: Jun 2008
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Handle: RePEc:hit:hituec:a503

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Related research
Keywords: multidimensional political competition games; partyunanimity Nash equilibria; military expenditure; ideological concerns;

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Find related papers by JEL classification:
C62 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Existence and Stability Conditions of Equilibrium
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation

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  1. Osborne, Martin J & Slivinski, Al, 1996. "A Model of Political Competition with Citizen-Candidates," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 65-96, February. [Downloadable!] (restricted)
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  2. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November. [Downloadable!] (restricted)
  3. Caplin, Andrew & Nalebuff, Barry, 1997. "Competition among Institutions," Journal of Economic Theory, Elsevier, vol. 72(2), pages 306-342, February. [Downloadable!] (restricted)
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  4. John E. Roemer, 1999. "The Democratic Political Economy of Progressive Income Taxation," Econometrica, Econometric Society, vol. 67(1), pages 1-20, January.
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  5. Patrick Francois, 2003. "Not-For-Profit Provision of Public Services," Economic Journal, Royal Economic Society, vol. 113(486), pages C53-C61, March. [Downloadable!] (restricted)
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  6. Roemer, John E., 1998. "Why the poor do not expropriate the rich: an old argument in new garb," Journal of Public Economics, Elsevier, vol. 70(3), pages 399-424, December. [Downloadable!] (restricted)
  7. John Roemer, 2005. "Will democracy engender equality?," Economic Theory, Springer, vol. 25(1), pages 217-234, 01. [Downloadable!] (restricted)
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(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. Naoki Yoshihara, 2008. "On the General Existence of Pure Strategy Political Competition Equilibrium in Multi-dimensional Party-Faction Models," Discussion Paper Series a511, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
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