The political economy of unfunded public pension liabilities

Dashle Kelley ()

Public Choice, 2014, vol. 158, issue 1, 38 pages

Abstract: This paper applies a public choice approach to the problem of unfunded pension liabilities and adopts the methodology of Congleton and Shughart ( 1990 ) to model underfunding of state-level public pension plans using the median voter theorem, along with the theory of “capture” by special interest groups, and a combined model of the two. With panel data from 2001 to 2009, the paper finds that the combined model provides the strongest explanation for the current levels of unfunded liabilities; hence, both median voter preferences and special interest group influence are affecting political outcomes. The special interest group model slightly outperforms the median voter model in direct comparisons. Copyright Springer Science+Business Media New York 2014

Keywords: Public pensions; Median voter theorem; Special interest group theory; Unfunded liabilities (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:158:y:2014:i:1:p:21-38

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DOI: 10.1007/s11127-012-0049-3

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