Voting on the Budget Deficit

Guido Tabellini and Alberto Alesina

American Economic Review, 1990, vol. 80, issue 1, 37-49

Abstract: This paper analyzes a model in which a group of rational individuals votes over the composition and time profile of public spending. All voters agree that a balanced budget is ex ante optimal. However, if there is disagreement between current and future majorities, a balanced budget is not a political equilibrium under majority rule. Under certain conditions, a majority of the voters favors a budget deficit, and the equilibrium deficit is larger the greater is the polarization among voters. Copyright 1990 by American Economic Association.

Date: 1990
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Related works:
Working Paper: Voting on the Budget Deficit (1990)
Working Paper: Voting on the Budget Deficit (1988)
Working Paper: Voting on the Budget Deficit (1988)
Working Paper: Voting on the Budget Deficit (1988)
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