期刊名称:Euro Area Balance of Payments and International Investment Position Statistics
印刷版ISSN:1830-3420
电子版ISSN:1830-3439
出版年度:2014
出版社:European Central Bank
摘要:This paper shows that a simple two-stage voting mechanism may im-plement a constrained optimal state dependent decision about a scalde cit. I consider a setup with strategic scal de cits à la Tabellini andAlesina (1990). Three groups of voters are informed about the productiv-ity of current public spending. Voters di¤er in their preferences for publicgoods and swing voterspreferences may change over time. The currentgovernment decides on the current spending mix and it has an incentiveto strategically overspend. Under certain conditions, a simple two-stagemechanism in which a de cit requires the approval by a supermajorityin parliament implements a constrained optimal decision. When the cur-rent majority is small, bargaining between political parties may furtherincrease social welfare. However, when the current majority is large, asupermajority mechanism with bargaining leads to a biased spending mixand reduces welfare whereas the laissez faire mechanism may yield the rst best. An appropriately adjusted majority threshold can deal withthis problem.