The Unanimous Voting Rule Is Not the Political Equivalent to Market Exchange
The unanimous voting rule is often viewed as analogous to voluntary market exchange. This paper demonstrates that when third-party pecuniary effects exist, this analogy breaks down because unlike markets, unanimous voting requires compensation for these effects. Thus, efficient market outcomes typically will be rejected by the unanimous voting rule. Even when transactions costs are low enough to make compensation feasible, the political outcome under unanimity will differ from the market outcome. The distributional effects of unanimity provide the incentive for people to substitute rent-seeking behavior for productive activity, and reduce the incentive for productive change, providing additional reasons why a less-than-unanimous voting rule may be optimal when resources are to be allocated politically. Copyright 2001 by Kluwer Academic Publishers
Volume (Year): 106 (2001)
Issue (Month): 3-4 (March)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/economics/public+finance/journal/11127/PS2|
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:106:y:2001:i:3-4:p:233-42. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.