Fiscal Churning and Political Efficiency

Filip Palda ()

Public Economics from EconWPA

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.

Keywords: Political efficiency; tax incidence; spending incidence; fiscal churning (search for similar items in EconPapers)
JEL-codes: D6 D7 H (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-pol
Date: 2001-11-10
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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http://129.3.20.41/eps/pe/papers/0111/0111008.pdf (application/pdf)

Related works:
Journal Article: Fiscal Churning and Political Efficiency (1997)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0111008

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