The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics

Weingast, Barry R.; Shepsle, Kenneth A.; Johnsen, Christopher

doi:10.1086/260997

“…Theories of legislative decision making emphasize that elected representatives are trading off the virtues of public goods against the attractiveness of spending the money on particularistic goods ('pork') benefitting voters in their home districts (Weingast, Shepsle, and Johnsen, 1981;Baron and Ferejohn, 1989;Volden and Wiseman, 2007;Fréchette, Kagel, and Morelli, 2012). This reasoning fits well with existing evidence from countries using plurality rule, notably the United States.…”

Section: Introductionsupporting

confidence: 63%

“…In the model of Weingast, Shepsle, and Johnsen (1981), a legislature of representatives from different districts decide autonomously on geographically targeted policies to be financed by joint taxation ('universalism'). The incentive to exploit the common pool is stronger if districts are smaller.…”

Section: Introductionmentioning

confidence: 99%

Local favoritism in at-large proportional representation systems

Fiva

¹

,

Halse

²

2016

Journal of Public Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Pork barrel spending is typically attributed to the strategic behavior of political elites hoping to be electorally rewarded by voters residing in their districts. Such behavior is expected to depend on the incentives imposed by the electoral system. We estimate the causal effect of local representation in a closed list proportional representation system where individual candidates have no clear electoral incentive to favor their hometown. Using data from Norwegian regional governments, we still find a hometown bias. We document that municipalities with a representative on the regional council from the same party as the governor tend to obtain more funding for local investments. In an extension we show that citizens also tend to vote more often for parties with a governor candidate from their own hometown, consistent with an expectation of particularistic benefits. Both effects are driven by municipalities with below median population size. Terms of use: Documents inJEL-Code: D720, H720, H770.

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“…Wildasin (1989). 29 If state governments are however able to precommit, a corrective grant will be neutral for state policy. Selecting fiscal instruments after state taxes are chosen leaves no rationale for the federal government to implement corrective policies.…”

Section: Resultsmentioning

confidence: 99%

“…Therefore, Eq. (11) (for both states) and the federal budget constraint 29 We should note that introducing a federal corrective policy toward state governments would generically imply an "undercorrection" of the tax competition externality since labor taxation is distortionary (e.g. Sandmo, 1975).…”

Section: A1 Slope Of the Reaction Functionsmentioning

confidence: 99%

Federal tax-transfer policy and intergovernmental pre-commitment

Koethenbuerger¹

2008

Regional Science and Urban Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Federal and state governments often differ in the capacity to pre-commit to expenditure and tax policy. Whether the implied sequence of public decisions has any efficiency implications is the subject of this paper. We resort to a setting which contrary to most of the literature does not exhibit a perfect tax-base overlap. We show that a federal government's pre-commitment capacity is welfare-improving. Efficiency, however, does not improve over all decision margins. The welfare-increasing policy entails a more distorted level of public consumption. Moreover, welfare may also improve if local governments are able to pre-commit towards the upper level. The rationale is that although federal transfers are formally unconditional they nevertheless entail a tax-price effect; thereby potentially counteracting incentives to engage in a "race to the bottom" in fiscal competition among local governments. Terms of use: Documents inJEL Code: H71, H23, H10.

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“…States Congress (Shepsle and Weingast, 1980;Weingast et al, 1981;Evans, 2004). According to these models, bargaining for fiscal legislation in a separation of powers system with a legislature organized into specialized committees should produce economically inefficient and unequal laws, oriented to catering for special (sectoral, local, particular) interests located at the subnational level at the expense of the federal Treasury.…”

Section: Tax Lawmaking In Argentina: General Patternsmentioning

confidence: 99%

Measuring the Political Economy of Tax Lawmaking: A Methodology and Evidence from Argentina

Alvaredo¹,

Bonvecchi

²

,

Calvo

³

et al. 2013

SSRN Journal

0

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Javier Alvaredo* Alejandro Bonvecchi** Ernesto Calvo*** Maximiliano Castillo Carrillo* Juan Carlos Gómez Sabaini**** * Consultora ACM ** Universidad Torcuato Di Tella-CONICET *** University of Maryland-College Park **** Universidad de Buenos Aires-GS Consultancy The unauthorized commercial use of Bank documents is prohibited and may be punishable under the Bank's policies and/or applicable laws. Terms of use: Documents in Copyright ©Inter-American Development Bank. This working paper may be reproduced for any non-commercial purpose. It may also be reproduced in any academic journal indexed by the American Economic Association's EconLit, with previous consent by the Inter-American Development Bank (IDB), provided that the IDB is credited and that the author(s) receive no income from the publication. Although recent research has shed new light on the political determinants and economic consequences of tax lawmaking, existing analyses rely on coarse data measuring political aggregates. Consequently, little is known about the political processes determining how tax legislation is written or their effect on the nature of tax reforms. This paper therefore develops a methodology to examine how Congress edits the content of tax legislation by measuring the ways Deputies, Senators, Presidents, and Ministers propose and amend such legislation. The Legislative Substance Scale proposed here measures the distance between a bill's original position and the actual outcome of the legislative process by comparing the differences in content according to coding of the main tax policy dimensions. The scale is used to build the first systematic database of tax lawmaking in Argentina, and to describe its general patterns of authorship, approval and substantive content across presidencies in the current democratic period. Cataloging-in-PublicationJEL classifications: D78, H20, H77

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The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics

Cited by 1,346 publications

References 17 publications

Local favoritism in at-large proportional representation systems

Local favoritism in at-large proportional representation systems

Federal tax-transfer policy and intergovernmental pre-commitment

Measuring the Political Economy of Tax Lawmaking: A Methodology and Evidence from Argentina

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