Inefficiency in Legislative Policymaking: A Dynamic Analysis

Marco Battaglini and Stephen Coate

American Economic Review, 2007, vol. 97, issue 1, 118-149

Abstract: This paper develops an infinite horizon model of public spending and taxation in which policy decisions are determined by legislative bargaining. The policy space incorporates both productive and distributive public spending and distortionary taxation. The productive spending is investing in a public good that benefits all citizens (e.g., national defense) and the distributive spending is district-specific transfers (e.g., pork-barrel spending). Investment in the public good creates a dynamic linkage across policymaking periods. The analysis explores the dynamics of legislative policy choices, focusing on the efficiency of the steady-state level of taxation and allocation of spending. (JEL D72, E62, H20, H50)

Date: 2007
Note: DOI: 10.1257/aer.97.1.118
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (101)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.97.1.118 (application/pdf)
http://www.aeaweb.org/aer/data/mar07/20050737_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Inefficiency in Legislative Policy-Making: A Dynamic Analysis (2005)
Working Paper: Inefficiency in Legislative Policy-Making: A Dynamic Analysis (2005)
Working Paper: Inefficiency in Legislative Policy-Making: A Dynamic Analysis (2005)
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:aea:aecrev:v:97:y:2007:i:1:p:118-149

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().