Universität zu Köln

Bierbrauer, Felix ORCID: 0000-0003-3879-9607 and Boyer, Pierre C. ORCID: 0000-0002-5495-7380 (2016). Efficiency, Welfare, and Political Competition*. Q. J. Econ., 131 (1). S. 461 - 519. CARY: OXFORD UNIV PRESS INC. ISSN 1531-4650

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Abstract

We study political competition in an environment in which voters have private information about their preferences. Our framework covers models of income taxation, public-goods provision, or publicly provided private goods. Politicians are vote-share maximizers. They can propose any policy that is resource-feasible and incentive-compatible. They can also offer special favors to subsets of the electorate. We prove two main results. First, the unique symmetric equilibrium is such that policies are surplus-maximizing and hence first-best Pareto-efficient. Second, there is a surplus-maximizing policy that wins a majority against any welfare-maximizing policy. Thus, in our model, policies that trade off equity and efficiency considerations are politically infeasible.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Bierbrauer, Felix UNSPECIFIED orcid.org/0000-0003-3879-9607 UNSPECIFIED Boyer, Pierre C. UNSPECIFIED orcid.org/0000-0002-5495-7380 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-285232
DOI:	10.1093/qje/qjv033
Journal or Publication Title:	Q. J. Econ.
Volume:	131
Number:	1
Page Range:	S. 461 - 519
Date:	2016
Publisher:	OXFORD UNIV PRESS INC
Place of Publication:	CARY
ISSN:	1531-4650
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB Faculty of Management, Economics and Social Sciences > Economics > Macroeconomic, Financial and Economic Policy > Professorship for Macroeconomic
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language OPTIMAL INCOME TAXATION; MARGINAL TAX RATES; REDISTRIBUTIVE POLITICS; SOCIAL PREFERENCES; LARGE NUMBERS; PUBLIC-GOODS; REPRESENTATIVE DEMOCRACY; ELECTORAL COMPETITION; LARGE ECONOMIES; INCENTIVES Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/28523