Democratic Public Good Provision
John Hassler (),
Kjetil Storesletten () and
Fabrizio Zilibotti ()
No 4044, CEPR Discussion Papers from C.E.P.R. Discussion Papers
This Paper analyses an overlapping generation model of public good provision under repeated voting. The public good is financed through age-dependent taxation that distorts human capital investment. Taxes redistribute income both across different skill groups and across generations. We contrast the political equilibria with the Ramsey allocation, and analyse the sources of inefficiency. The political equilibria can feature both under- and over-provision of public good, as well an inefficient life-cycle profile of taxes.
Keywords: markov equilibrium; multiple equilibria; political economy; public good; ramsey allocation; taxation (search for similar items in EconPapers)
JEL-codes: D72 D78 E62 H21 H41 H53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic, nep-pbe and nep-pol
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Journal Article: Democratic public good provision (2007)
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