Inefficiency in Legislative Policy-Making: A Dynamic Analysis / Marco Battaglini, Stephen Coate.

Format:

Book

Author/Creator:

Battaglini, Marco.

Contributor:

National Bureau of Economic Research.

Coate, Stephen.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11495.

NBER working paper series no. w11495

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Inefficiency in Legislative Policy-Making

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2005.

Summary:

This paper develops an infinite horizon model of public spending and taxation in which policy

decisions are determined by legislative bargaining. The policy space incorporates both productive

and distributive public spending and distortionary taxation. The productive spending is investing in

a public good that benefits all citizens (e.g., national defense or air quality) and the distributive

spending is district-specific transfers (e.g., pork barrel spending). Investment in the public good

creates a dynamic linkage across policy-making periods. The analysis explores the dynamics of

legislative policy choices, focusing on the efficiency of the steady state level of taxation and

allocation of tax revenues. The model sheds new light on the efficiency of legislative policy-making

and has a number of novel positive implications.

Notes:

Print version record

August 2005.