Policy Experimentation, Redistribution and Voting Rules

T. Renee Bowen and Vincent Anesi

No 25033, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study optimal policy experimentation by a committee. We consider a dynamic bargaining game in which committee members choose either a risky reform or a safe alternative each period. When no redistribution is allowed the unique equilibrium outcome is generically inefficient. When redistribution is allowed (even small amounts), there always exists an equilibrium that supports optimal experimentation for any voting rule without veto players. With veto players, however, optimal policy experimentation is possible only with a sufficient amount of redistribution. We conclude that veto rights are more of an obstacle to optimal policy experimentation than constraints on redistribution.

JEL-codes: C73 C78 D61 D78 H61 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-cdm, nep-gth and nep-mic
Note: ITI PE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Policy Experimentation, Redistribution and Voting Rules (2018)
Working Paper: Policy Experimentation, Redistribution and Voting Rules (2018)
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