Publication: Voting on the Budget Deficit
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Date
1990
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American Economic Association
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Tabellini, Guido, and Alberto Alesina, 1990. Voting on the budget deficit. American Economic Review 80(1): 37-49.
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Abstract
This paper analyzes a model in which a group of rational individuals votes over the composition and time profile of public spending. All voters agree that a balanced budget is ex ante optimal. However, if there is disagreement between current and future majorities, a balanced budget is not a political equilibrium under majority rule. Under certain conditions a majority of the voters favors a budget deficit, and the equilibrium deficit is larger the greater is the polarization among voters.
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