Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102115
Authors: 
Bierbrauer, Felix
Boyer, Pierre C.
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4814
Abstract: 
We study political competition in an environment in which voters have private information about their preferences. Our framework covers models of income taxation, public-goods provision or publicly provided private goods. Politicians are vote-share-maximizers. They can propose any policy that is resource-feasible and incentive-compatible. They can also offer special favors to subsets of the electorate. We prove two main results. First, in a symmetric equilibrium, policies are surplus-maximizing and hence first-best Pareto-efficient. Second, there is a surplus-maximizing policy that wins a majority against any welfare-maximizing policy. Thus, in our model, policies that trade off equity and efficiency considerations are politically infeasible.
Subjects: 
political competition
asymmetric information
public goods
non-linear income taxation
redistributive politics
JEL: 
C72
D72
D82
H41
Document Type: 
Working Paper

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