This paper studies the impact of lobbying on political competition and policy outcomes in a framework which integrates the citizen-candidate model of representative democracy with the menu-auction model of lobbying. Positive and normative issues are analysed. On the positive side, lobbying need have little or no effect on policy outcomes because voters can restrict the influence of lobbyists by supporting candidates with offsetting policy preferences. On the normative side, coordination failure among lobbyists can result in Pareto inefficient policy choices. In addition, by creating rents to holding office, lobbying can lead to “excessive” entry into electoral competition.

This paper provides a comprehensive treatment of a basic income maintenance problem for a group of individuals who differ in their income generating abilities. It stresses the impact that imperfect information about such abilities has on programme design. The analysis serves two purposes. First, we are able to unify the theoretical literature on the income maintenance problem. Second, we examine the impact of allowing the government to impose workfare on recipients of income support. In addition to being of policy interest, this is a theoretically challenging problem since it requires solving a multi-dimensional screening problem. The solution that we find is strikingly simple. It separates the poor into two categories, with the lower income groups subject to workfare while facing a 100% marginal tax rate on earnings. The second group does no public work and is offered a benefit schedule which taxes earnings at a lower rate.

This paper investigates the problem of optimal districting in the context of a simple model of legislative elections. In the model, districting matters because it determines the seat-vote curve, which describes the relationship between seats and votes. The paper first characterizes the optimal seat-vote curve and shows that, under a weak condition, there exist districtings that generate this ideal relationship. The paper then develops an empirical methodology for computing seat-vote curves and measuring the welfare gains from implementing optimal districting. This is applied to analyze the districting plans used to elect U.S. state legislators during the 1990s.

This paper develops an approach to the study of democratic policy-making where politicians are selected by the people from those citizens who present themselves as candidates for public office. The approach has a number of attractive features. First, it is a conceptualization of a pure form of representative democracy in which government is by, as well as of, the people. Second, the model is analytically tractable, being able to handle multidimensional issue and policy spaces very naturally. Third, it provides a vehicle for answering normative questions about the performance of representative democracy.

This paper examines the allocative performance of rotating savings and credit associations (roscas), a financial institution which is observed world-wide. We develop a model in which individuals save for an indivisible good and study roscas which distribute funds using random allocation and bidding. The allocations achieved by the two types of rosca are compared with that achieved by a credit market and with efficient allocations more generally. We find that neither type of rosca is efficient and that individuals are better off with a credit market than a bidding rosca. Nonetheless, a random rosca may sometimes yield a higher level of ex ante expected utility to prospective participants than would a credit market.