Minimum winning versus oversized coalitions in public finance: The role of uncertainty
Journal
Social Choice and Welfare
Journal Volume
34
Journal Issue
2
Pages
345-361
Date Issued
2010
Author(s)
Yang, C. C.
Abstract
This paper extends Persson et al.'s (J Polit Econ 108:1121-1161, 2000) simple legislature in the context of public finance with certainty to uncertainty. In our uncertain world, oversized coalitions (OSCs) as well as minimum winning coalitions (MWCs) may arise in equilibrium, and the agenda setter's proposed policy may fail to receive a majority support. This is in marked contrast to the certain world, in which only MWCs can arise in equilibrium and the agenda setter's proposal never fails to pass. When OSCs arise, we show that both public good provision and redistribution are likely to achieve their first-best solution, even if the legislature is simple. © Springer-Verlag 2009.
Type
journal article