Endogenous Constitutions

Davide Ticchi () and Andrea Vindigni

No 726, Seminar Papers from Stockholm University, Institute for International Economic Studies

Abstract: We present a theory of the choice of alternative democratic constitutions, a majoritarian or a consensual one, in a n 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 have a larger government and a higher level of taxation. A consensual system turns out to be preferred by the society when ex ante income inequality is relatively low, while a majoritarian system is chosen when income inequality is relatively high. Moreover, we obtain that consensual democracies should be expected to be ruled more often by center-left coalitions. Finally, our model also provides a new rationale, based on the endogeneity of the political system, of the positive or absent (rather than negative) association between equality and redistribution transpiring from the cross-sectional evidence of developed countries presented in some recent studies. Some historical and empirical evidence supporting our results is provided.

Keywords: Endogenous Constitutions; Consensual Democracy; Majoritarian Democracy; Inequality; Heterogeneity; Redistribution (search for similar items in EconPapers)
JEL-codes: D31 D72 P16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hpe, nep-mic and nep-pol
Date: 2003-11-01
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Working Paper: Endogenous Constitutions (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:iiessp:0726

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