Marsiliani, L. and Renstrom, T. I. (2007) 'Political institutions and economic growth.', Economics of governance., 8 (3). pp. 233-261.
We analyze the impact of micro-founded political institutions on economic growth in an overlapping-generations economy, where individuals differ in preferences over a public good (as well as in age). Labour- and capital taxes finance the public good and a public input. The benchmark institution is a parliament, where all decisions are taken. Party entry, parliamentary composition, coalition formation, and bargaining are endogenous. We compare this constitution to delegation of decisionmaking, where a spending minister (elected in parliament or appointed by the largest party). Delegation of decisionmaking tends to yield lower growth, mainly due to the occurrence of production inefficiency.
|Keywords:||Voting, Bargaining, Taxation, Endogenous growth, Overlapping generations.|
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|Publisher Web site:||http://dx.doi.org/10.1007/s10101-007-0038-z|
|Record Created:||19 Aug 2008|
|Last Modified:||19 Mar 2010 16:20|
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