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The Cabals of a Few or the Confusion of a Multitude: The Institutional Trade-Off between Representation and Governance

  • Leah Brooks
  • Justin Phillips
  • Maxim Sinitsyn

Our model illustrates how political institutions trade off between the competing goals of representation and governance, where governance is the responsiveness of an institution to a single pivotal voter. We use exogenous variation from the 30-year history of the federal Community Development Block Grant program to identify this trade-off. Cities with more representative governments—those with larger city councils—use more grant funds to supplement city revenues rather than implementing tax cuts, thereby moving policy further away from the governance ideal. In sum, more representative government is not without cost. (JEL D72, H71, R50)

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Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 3 (2011)
Issue (Month): 1 (February)
Pages: 1-24

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Handle: RePEc:aea:aejpol:v:3:y:2011:i:1:p:1-24
Note: DOI: 10.1257/pol.3.1.1
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  12. Byron Lutz, 2010. "Taxation with Representation: Intergovernmental Grants in a Plebiscite Democracy," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 316-332, May.
  13. Justin H. Phillips, 2010. "An Institutional Explanation for the Stickiness of Federal Grants," Journal of Law, Economics and Organization, Oxford University Press, vol. 26(2), pages 243-264.
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