Fiscal Churning and Political Efficiency
AbstractThis paper proposes churned transfers as a measure of political inefficiency. A transfer is churned when at least the same level of voter satisfaction could have been achieved by lowering the voter's tax burden by the amount of the transfer. Previous measures of political efficiency---Pommerehne and Schneider (1983)---depend on the researcher’s assumptions about voter preferences. Churned transfers avoid this problem, but depend on the researcher’s assumptions about government tax and spending incidence. This paper suggests fiscal churning as a supplement to measures of political efficiency that rely on assumptions about the preferences of the median voter. Churning measures promise to throw light on the Chicago-Virginia controversy over the efficiency of political systems.
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Bibliographic InfoPaper provided by EconWPA in its series Public Economics with number 0111008.
Length: 19 pages
Date of creation: 10 Nov 2001
Date of revision:
Note: Type of Document - PDF; prepared on IBM PC ; to print on HP/PostScript; pages: 19; figures: included. PDF file can be viewed or printed
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Political efficiency; tax incidence; spending incidence; fiscal churning;
Other versions of this item:
- D6 - Microeconomics - - Welfare Economics
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- H - Public Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-11-21 (All new papers)
- NEP-MAC-2001-10-29 (Macroeconomics)
- NEP-PBE-2001-11-21 (Public Economics)
- NEP-POL-2001-11-21 (Positive Political Economics)
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