Political Institutions and Economic Growth

Renström, Thomas I and Laura Marsiliani

No 6143, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We analyze the impact of micro-founded political institutions on economic growth in an overlapping-generations economy, where individuals differ in preferences over a public good (as well as in age). Labour and capital taxes finance the public good and a public input. The benchmark institution is a parliament, where all decisions are taken. Party entry, parliamentary composition, coalition formation, and bargaining are endogenous. We compare this constitution to delegation of decision-making, where a spending minister (elected in parliament or appointed by the largest party). Delegation of decision-making tends to yield lower growth, mainly due to the occurrence of production inefficiency.

Keywords: Bargaining; Endogenous growth; Overlapping generations; Taxation; Voting (search for similar items in EconPapers)
JEL-codes: D72 D90 H20 H41 O41 (search for similar items in EconPapers)
Date: 2007-02
New Economics Papers: this item is included in nep-dev, nep-dge, nep-pbe, nep-pol and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://cepr.org/publications/DP6143 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:6143

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6143

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().