American Economic Review Vol. 85 No. 4 1995
Voting over Economic Plans
Abstract
We review and provide motivation for a one-sector model of economic growth in which decisions about capital accumulation are made by a political process. If it is possible to commit for at least three periods into the future, then for any feasible consumption plan, there is a perturbation that is majority-preferred to it. Furthermore, plans that minimize the maximum vote that can be obtained against them yield a political business cycle. If it is impossible to commit, voters select the optimal consumption plan for the median voter.
- Volume
- 85
- Issue
- 4
- Pages
- 860-871
- Sources
- bibtex:phds-export.bib