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Democracy of "Taxation-Redistribution" and Peacetime Budget Deficit

Author

Listed:
  • Konstantin Yanovskiy

    (Gaidar Institute for Economic Policy)

  • Sergey Zhavoronkov

    (Gaidar Institute for Economic Policy)

  • Dmitry Shestakov

    (Gaidar Institute for Economic Policy)

Abstract

The link between an introduction of the universal suffrage and the growth of government spending has been established in some literature (Meltzer, Richard, 1981, Aidt et al., 2006, Funk and Guthmann, 2006). In this article we try to identify a more detailed mechanism behind that link. So, we addressed to the conflict of interest of bureaucrats, and of the state subsidy beneficiaries. Historically the growth of government spending might be traced to the emergence of mainstream left parties, which openly stood in favor of the nanny state and government help from the cradle to the grave[1] as a priority over the provision of pure public goods. Finally we check the hypothesis that the growth of government care correlates with the chronic illnesses of the modern state finance like budget deficit, state debt and inflation.

Suggested Citation

  • Konstantin Yanovskiy & Sergey Zhavoronkov & Dmitry Shestakov, 2013. "Democracy of "Taxation-Redistribution" and Peacetime Budget Deficit," Working Papers 0078, Gaidar Institute for Economic Policy, revised 2013.
  • Handle: RePEc:gai:wpaper:0078
    as

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    File URL: http://www.iep.ru/files/RePEc/gai/wpaper/0078Yanovskiy.pdf
    File Function: Revised version, 2013
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    References listed on IDEAS

    as
    1. Tavares, Jose & Wacziarg, Romain, 2001. "How democracy affects growth," European Economic Review, Elsevier, vol. 45(8), pages 1341-1378, August.
    2. Aidt, T.S. & Dutta, Jayasri & Loukoianova, Elena, 2006. "Democracy comes to Europe: Franchise extension and fiscal outcomes 1830-1938," European Economic Review, Elsevier, vol. 50(2), pages 249-283, February.
    3. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Social, Employment and Migration Working Papers 35, OECD Publishing.
    4. Eloranta, Jari, 2007. "From the great illusion to the Great War: Military spending behaviour of the Great Powers, 1870 1913," European Review of Economic History, Cambridge University Press, vol. 11(02), pages 255-283, August.
    5. Konstantin Yanovsky & Ilia Zatcovetzky & Georgy Syunyaev, 2013. "How safe is it, to Confuse Defense with Care?," Working Papers 0064, Gaidar Institute for Economic Policy, revised 2013.
    6. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    7. Smith, Vernon L, 1980. "Experiments with a Decentralized Mechanism for Public Good Decisions," American Economic Review, American Economic Association, vol. 70(4), pages 584-599, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Universal Suffrage; Left parties; Budget Deficit; Conflict of Interest.;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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