Off-the-peak preferences over government size*
Francisco Martínez-Mora and
M. Socorro Puy ()
No 10/04, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester
We study the political consequences of policy preferences which are non-symmetric around the peak. While the usual assumption of symmetric preferences is innocuous in political equilibria with plat-forms convergence, it is not neutral when candidates are differentiated. We show that a larger government size emerges when preferences of the median voter off-the-peak are more intense towards overprovision (what we call wasteful preferences), whereas a smaller government results when her preferences are more intense towards underprovision (scrooge preferences). We then analyze the determinants of preferences off-the-peak and find that: (i) The sign of the third derivative of the policy-induced utility function indicates whether preferences are wasteful (positive) or scrooge (negative). (ii) The analog of Kimball's coefficient of prudence can be used to measure degrees of wastefulness and scroogeness. (iii) Consumers' risk aversion and government decreasing effectiveness in producing the public good generate scrooge.
Keywords: Single-peaked preferences; citizen-candidate; coefficient of prudence; differentiated platforms; risk-aversion (search for similar items in EconPapers)
JEL-codes: D72 H31 H5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-pol and nep-upt
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Working Paper: Off-the-peak preferences over government size (2010)
Working Paper: Off-the-peak preferences over government size (2009)
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