Export to your Reference Manger

Please Copy & Paste



Bookmark and Share

Legislative bargaining and the dynamics of public investment

[working paper]

Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas

fulltextDownloadDownload full text

(external source)

Citation Suggestion

Please use the following Persistent Identifier (PID) to cite this document:http://hdl.handle.net/10419/54759

Further Details
Corporate Editor Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract We present a legislative bargaining model of the provision of a durable public good over an infinite horizion. In each period, there is a societal endowment which can either be invested in the public good or consumed. We characterize the optimal public policy, defined by the time path of investment and consumption. In each period, a legislature with presentatives of each of n districts bargain over the current period's endowment for investment in the public good and transfers to each district. We analyze the Markov perfect equilibrium under different voting q-rules where q is the number of yes votes required for passage. We show that the efficiency of the public policy is increasing in q because higher q leads to higher investment in the public good and less pork. We examine the theoretical equilibrium predictions by conducting a laboratory experiment with fiveperson committees that compares three alternative voting rules: unanimity (q=5); majority (q=3); and dictatorship (q=1). (author's abstract)
Keywords investment; consumption; law and order; experiment; nonmarket good; commerce; political economy; legislative; negotiation; public investment
Classification National Economy
Document language English
Publication Year 2011
City Berlin
Page/Pages 49 p.
Series Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Verhalten auf Märkten, SP II 2011-205
Status Published Version; reviewed
Licence Deposit Licence - No Redistribution, No Modifications