Political Influence, Economic Interests and Endogenous Tax Structure in a Computable Equilibrium Framework: with Applicatioon to the United States, 1973 and 1983

Louis Hotte () and Stanley Winer ()

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: A full understanding of public affairs requires the ability to distinguish between the policies that voters would like the government to adopt, and the influence that different voters or group of voters actually exert in the democratic process. We consider the properties of a computable equilibrium model of a competitive political economy in which the economic interests of groups of voters and their effective influence on equilibrium policy outcomes can be explicitly distinguished and computed. The model incorporates an amended version of the GEMTAP tax model, and is calibrated to data for the United States for 1973 and 1983. Emphasis is placed on how the aggregation of GEMTAP households into groups within which economic and political behaviour is assumed homogeneous affects the numerical representation of interests and influence for representative members of each group. Experiments with the model suggest that the changes in both interests and influence are important parts of the story behind the evolution of U.S. tax policy in the decade after 1973.

Keywords: litical comtition; obabilistic voting; litical influence; tax licy; blic goods; GEMTAP; comtable equilibrium (search for similar items in EconPapers)
JEL-codes: D70 D72 (search for similar items in EconPapers)
Pages: 51 pages
Date: 1998
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Related works:
Journal Article: Political Influence, Economic Interests and Endogenous Tax Structure in a Computable Equilibrium Framework: With Application to the United States, 1973 and 1983 (2001)
Working Paper: Political Influence, Economic Interests and Endogenous Tax Structure in a Computable Equilibrium Framework: with Application to the United States, 1973 and 1983 (2001)
Working Paper: Political Influence, Economic Interests and Endogenous Tax Structure in a Computable Equilibrium Framework: With Applicatioon to the United States, 1973 and 1983 (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:9802

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