Besley, Timothy and Smart, Michael (2007) Fiscal restraints and voter welfare. Journal of public economics, 91 (3-4). pp. 755-773. ISSN 0047-2727
Abstract
This paper explores the logic of fiscal restraints in a political agency model with both moral hazard and adverse selection. The role of the political process is both to discipline incumbents who may act against the public interest and to sort in those politicians who are most likely act in voters' interests. We use the model to examine the optimality of inefficient taxation, limits on the size of government, increasing transparency, and yardstick competition. Some conclusions are surprising. For example, we show that some forms of fiscal restraint can only be desirable when incumbents are sufficiently likely to be benevolent.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.elsevier.com.gate2.library.lse.ac.uk/wp... |
| Additional Information: | © 2006 Published by Elsevier B.V. |
| Uncontrolled Keywords: | political agency, public choice, transparency, yardstick competition |
| Library of Congress subject classification: | H Social Sciences > HB Economic Theory J Political Science > JF Political institutions (General) |
| Journal of Economic Literature Classification System: | H - Public Economics > H1 - Structure and Scope of Government H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents |
| Sets: | Departments > Economics Collections > Economists Online Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) |
| Rights: | http://www.lse.ac.uk/library/rights/LSERO.htm |
| URL: | http://eprints.lse.ac.uk/33711/ |
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