Volatility and Resilience of Democratic Public-Good Provision
METADATA ONLY
Loading...
Author / Producer
Date
2024-03
Publication Type
Working Paper
ETH Bibliography
yes
Citations
Altmetric
METADATA ONLY
Data
Rights / License
Abstract
We examine democratic public-good provision with heterogeneous legislators. Decisions are taken by majority rule and an agenda-setter proposes a level of the public good, taxes, and subsidies. Members are heterogeneous with respect to their benefits from the public good. We find that, depending on the status quo public-good level, the agenda-setter will form a coalition with the agents who most desire, or least desire, the public good, and we may observe ‘strange bedfellow’ coalitions. Moreover, public-good provision is a non-monotonic function of the status quo public-good level. In the dynamic setting, public-good provision fluctuates endogenously, even if the agenda-setter stays the same over time. Moreover, the more polarized the legislature is, the higher is the volatility of public-good provision and the longer it may take for a society to recover from negative shocks to public-good provision. We illustrate these findings for a two-party system with polarized parties.
Permanent link
Publication status
published
External links
Editor
Book title
Journal / series
Volume
Pages / Article No.
11004
Publisher
CESifo
Event
Edition / version
Methods
Software
Geographic location
Date collected
Date created
Subject
Legislative bargaining; Coalition; Public goods; Polarization; Resilience
Organisational unit
03729 - Gersbach, Hans (emeritus) / Gersbach, Hans (emeritus)