Schneider, Maik T.
- Working Paper
Rights / licenseIn Copyright - Non-Commercial Use Permitted
In this paper we examine the impact of tax contracts as a novel institution on elections, policies, and welfare. We consider a political game in which three parties compete to form the government. Parties have policy preferences about the level of public-good provision and benefit from perks when in office. A government raises taxes for both purposes. We show that tax contracts yield moderate policies and lead to lower perks by avoiding the formation of grand coalitions in order to win government. Moreover, in polarized societies they unambiguously improve the welfare of the median voter Show more
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Journal / seriesEconomics Working Paper Series
PublisherETH, Center of Economic Research
SubjectENTSCHEIDUNGSFINDUNG IN DER POLITIK; ELECTIONS (INTERNAL POLITICS); Elections; WAHLVERHALTEN + STIMMVERHALTEN (INNENPOLITIK); ELECTION BEHAVIOUR + VOTING BEHAVIOUR (INTERNAL POLITICS); DECISION-MAKING IN POLITICS; WIRTSCHAFTSMODELLE; ASYMMETRIC INFORMATION (INFORMATION THEORY); Government formation; STEUERN (ÖFFENTLICHE FINANZEN); ASYMMETRISCHE INFORMATIONEN (INFORMATIONSTHEORIE); Political contracts; TAXES (PUBLIC FINANCE); ECONOMIC MODELS; Tax promise; WAHLEN (INNENPOLITIK)
Organisational unit02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.
03729 - Gersbach, Hans / Gersbach, Hans
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