Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/31961 
Year of Publication: 
2008
Series/Report no.: 
Diskussionsbeiträge No. 138
Publisher: 
Georg-August-Universität Göttingen, Volkswirtschaftliches Seminar, Göttingen
Abstract: 
The topic of reforms is hotly debated among politicians and researchers. There are many approaches to explore the origins of reform deadlocks and budget deficits. Central to all these approaches are the costs generated either by the Status Quo or by eliminating the Status Quo via a reform. Costs generated by the reform can be offset by the government using compensation payments. Crucial for a successful reform is to minimize these compensation costs. The task is rather complicated, as certain groups of individuals, such as countries, federal states or political parties are hard to separate. Against this background this paper shows that under a majority rule the compensation costs can be minimized via enacting fragmentation among the population.
Subjects: 
Political Economy
Fragmentation Compensation Payments
JEL: 
H30
D78
P16
Document Type: 
Working Paper

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