Channeling the Say in Political Decision Bodies

Hans Gersbach, Stephan Imhof () and Oriol Tejada

No 10154, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We examine optimal procedures for public project provision, financing, and redistribution in democracy. We consider a large and heterogeneous decision body and show that first-best outcomes are obtained by a procedure that involves two proposal-making rounds, the right of the minority to move first, and a ban on subsidies for the agenda-setters. We explore the robustness of the result and consider applications of our rules. For instance, the result rationalizes those rules of democracies that grant minorities in the electorate or in parliament the right to initiate collective decisions on new project proposals. We further show that the above procedure constitutes the unique minimal form of political competition that ensures first-best outcomes.

Keywords: Constitutional design; Majority rule; Public project provision; Subsidies (search for similar items in EconPapers)
JEL-codes: D72 H40 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-cdm, nep-pol and nep-ppm
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