Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/129352 
Erscheinungsjahr: 
2015
Schriftenreihe/Nr.: 
Working Paper No. 1516
Verlag: 
Koç University-TÜSİAD Economic Research Forum (ERF), Istanbul
Zusammenfassung: 
Which budgetary institutions result in efficient provision of public goods? We analyze a model with two parties bargaining over the allocation to a public good each period. Parties place different values on the public good, and these values may change over time. We focus on budgetary institutions that determine the rules governing feasible allocations to mandatory and discretionary spending programs. Mandatory spending is enacted by law and remains in effect until changed, and thus induces an endogenous status quo, whereas discretionary spending is a periodic appropriation that is not allocated if no new agreement is reached. We show that discretionary only and mandatory only institutions typically lead to dynamic inefficiency and that mandatory only institutions can even lead to static inefficiency. By introducing appropriate flexibility in mandatory programs, we obtain static and dynamic efficiency. An endogenous choice of mandatory and discretionary programs, sunset provisions and state-contingent mandatory programs can provide this flexibility in increasingly complex environments.
Schlagwörter: 
budget negotiations
mandatory spending
discretionary spending
flexibility
sunset provisions
state contingency
endogenous status quo
dynamic efficiency
JEL: 
C73
C78
D61
D78
H61
Dokumentart: 
Working Paper

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