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Political institutions and economic growth

Marsiliani, L.; Renstrom, T.I.

Authors



Abstract

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.

Citation

Marsiliani, L., & Renstrom, T. (2007). Political institutions and economic growth. Economics of Governance, 8(3), 233-261. https://doi.org/10.1007/s10101-007-0038-z

Journal Article Type Article
Publication Date May 1, 2007
Deposit Date Aug 19, 2008
Journal Economics of Governance
Print ISSN 1435-6104
Electronic ISSN 1435-8131
Publisher Springer
Peer Reviewed Peer Reviewed
Volume 8
Issue 3
Pages 233-261
DOI https://doi.org/10.1007/s10101-007-0038-z
Keywords Voting, Bargaining, Taxation, Endogenous growth, Overlapping generations.
Public URL https://durham-repository.worktribe.com/output/1564767


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