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Endogenous constitutions

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  • Davide Ticchi
  • Andrea Vindigni

Abstract

We present a theory of the choice of alternative democratic constitutions, a majoritarian or a consensual one, in an unequal society. A majoritarian democracy redistributes resources from the collectivity toward relatively few people, and has a relatively small government and low level of taxation. A consensual democracy redistributes resources toward a broader spectrum of social groups but also has a larger government and a higher level of taxation. We show that a consensual system turns out to be preferred by society when ex ante income inequality is relatively low, while a majoritarian system is chosen when income inequality is relatively high. We also obtain that consensual democracies should be expected to be ruled more often by center-left coalitions while the right should have an advantage in majoritarian constitutions. The implications for the relationship between inequality and redistribution are discussed. Historical evidence and a cross-sectional analysis support our results.

Suggested Citation

  • Davide Ticchi & Andrea Vindigni, 2002. "Endogenous constitutions," Economics Working Papers 896, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2005.
  • Handle: RePEc:upf:upfgen:896
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    Keywords

    Endogenous constitutions; consensual democracy; majoritarian democracy; inequality;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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