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A legislative bargaining approach to earmarked public expenditures


  • Jeremy J Jackson

    () (North Dakota State University)


This paper develops a model of legislative spending in which revenues can be spent through earmarks or a general fund. Legislative choice is modeled as a Baron and Ferejohn style legislative bargaining game. The novel approach is to model the bargaining process as a two-stage game reflecting the reality that earmarked expenditures precede general fund appropriations. This drives the result that all revenue is spent by way of earmarking leaving no revenue in the general fund.

Suggested Citation

  • Jeremy J Jackson, 2011. "A legislative bargaining approach to earmarked public expenditures," Economics Bulletin, AccessEcon, vol. 31(3), pages 2006-2020.
  • Handle: RePEc:ebl:ecbull:eb-11-00272

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    References listed on IDEAS

    1. Barro, Robert J, 1979. "On the Determination of the Public Debt," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 940-971, October.
    2. Huang, Chao-Hsi & Lin, Kenneth S., 1993. "Deficits, government expenditures, and tax smoothing in the United States: 1929-1988," Journal of Monetary Economics, Elsevier, vol. 31(3), pages 317-339, June.
    3. International Monetary Fund, 1999. "Spend Now, Pay Later? Tax Smoothing and Fiscal Sustainability in South Asia," IMF Working Papers 99/63, International Monetary Fund.
    4. Paul Cashin & Nilss Olekalns & Ratna Sahay, 1998. "Tax Smoothing in a Financially Repressed Economy; Evidence from India," IMF Working Papers 98/122, International Monetary Fund.
    5. Campbell, John Y & Shiller, Robert J, 1987. "Cointegration and Tests of Present Value Models," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 1062-1088, October.
    6. Crosby, M. & Olekalns, N., 1998. "Some Long Run Evidence on Tax Smoothing," Department of Economics - Working Papers Series 609, The University of Melbourne.
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    Cited by:

    1. Jeremy Jackson, 2013. "Tax earmarking, party politics and gubernatorial veto: theory and evidence from US states," Public Choice, Springer, vol. 155(1), pages 1-18, April.

    More about this item


    Earmarking; legislative bargaining; public goods.;

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • D7 - Microeconomics - - Analysis of Collective Decision-Making


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