Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/17935
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dc.contributor.authorGraves, Philip E.en_US
dc.date.accessioned2009-01-28T15:05:03Z-
dc.date.available2009-01-28T15:05:03Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/17935-
dc.description.abstractElected representatives have little incentive to pursue the interests of those electing them once they are elected. This well-known principle-agent problem leads, in a variety of theories of government, to nonoptimally large levels of government expenditure. An implication is that budgetary rules are seen as necessary to constrain politicians? tax and spending behavior. Popular among such constraints are various Balanced Budget Amendment proposals. These approaches, however, are shown here to have serious limitations, including failure to address the central concern of spending level. An alternative approach is advanced here that relies on a Coase-like mechanism that transfers control of government spending to the voter. Prisoner's dilemma incentives and political competition are seen to be critical to the superiority of the present mechanism to approaches requiring budget balance.en_US
dc.language.isoengen_US
dc.publisher|aKiel Institute for the World Economy (IfW) |cKiel-
dc.relation.ispartofseries|aEconomics Discussion Papers / Institut für Weltwirtschaft |x2007-12en_US
dc.subject.jelH61en_US
dc.subject.jelH62en_US
dc.subject.jelH72en_US
dc.subject.jelH11en_US
dc.subject.ddc330en_US
dc.subject.keywordpolitical incentivesen_US
dc.subject.keywordgovernment spendingen_US
dc.subject.keywordmechanism designen_US
dc.subject.keywordbalanced budget amendmentsen_US
dc.titleA Simple Coase-Like Mechanism that Transfers Control of Government Spending Levels from Politicians to Votersen_US
dc.typeWorking Paperen_US
dc.identifier.ppn558073867en_US
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.en-
dc.identifier.repecRePEc:zbw:ifwedp:5526-

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