Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93875
Authors: 
von Hagen, Jürgen
Year of Publication: 
2005
Series/Report no.: 
SFB/TR 15 Discussion Paper 149
Abstract: 
We discuss two essential problems of the political economy of public finances: The principal agent problem between voters and elected politicians and the common pool problem arising from the fact that money drawn from a general tax fund is used to pay for policies targeting more or less narrow groups in society. Three institutional mechanisms exist to deal with these problems, ex-ante rules controlling the behavior of elected policy makers, electoral rules creating accountability of and competition among policy makers, and budgeting processes internalizing the common pool externality. We review recent theoretical and empirical research and discuss its implications for research and institutional design.
Subjects: 
electoral systems
fiscal rules
budgeting processes
JEL: 
H11
H61
H62
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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