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Fiscal Churning and Political Efficiency

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  • Filip Palda

    (Ecole nationale d'administration publique in Montreal)

Abstract

This paper proposes churned transfers as a measure of political inefficiency. A transfer is churned when at least the same level of voter satisfaction could have been achieved by lowering the voter's tax burden by the amount of the transfer. Previous measures of political efficiency---Pommerehne and Schneider (1983)---depend on the researcher’s assumptions about voter preferences. Churned transfers avoid this problem, but depend on the researcher’s assumptions about government tax and spending incidence. This paper suggests fiscal churning as a supplement to measures of political efficiency that rely on assumptions about the preferences of the median voter. Churning measures promise to throw light on the Chicago-Virginia controversy over the efficiency of political systems.

Suggested Citation

  • Filip Palda, 2001. "Fiscal Churning and Political Efficiency," Public Economics 0111008, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0111008
    Note: Type of Document - PDF; prepared on IBM PC ; to print on HP/PostScript; pages: 19; figures: included. PDF file can be viewed or printed
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    References listed on IDEAS

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    1. Roll, Richard, 1977. "A critique of the asset pricing theory's tests Part I: On past and potential testability of the theory," Journal of Financial Economics, Elsevier, vol. 4(2), pages 129-176, March.
    2. Filip Palda, 2005. "Why Do Voters Demand Universal Government Benefits?," Public Economics 0503009, University Library of Munich, Germany.
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    2. Alexandre Couture Gagnon, 2018. "Filip Palda: In memoriam," Public Choice, Springer, vol. 174(3), pages 213-217, March.
    3. Antonis Adam & Manthos Delis & Pantelis Kammas, 2011. "Public sector efficiency: leveling the playing field between OECD countries," Public Choice, Springer, vol. 146(1), pages 163-183, January.
    4. Filip Palda, 2002. "Interest Groups: An Introduction," Public Economics 0209006, University Library of Munich, Germany.

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    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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