| ID | 113559 |
| Title Proper | Legislative bargaining and the dynamics of public investment |
| Language | ENG |
| Author | Battaglini, Marco ; Nunnari, Salvatore ; Palfrey, Thomas R |
| Publication | 2012. |
| Summary / Abstract (Note) | We present a legislative bargaining model of the provision of a durable public good over an infinite horizon. In each period, there is a societal endowment that 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 a legislature representatives 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 five-person committees that compares three alternative voting rules: unanimity (q = 5), majority (q = 3), and dictatorship (q = 1). |
| `In' analytical Note | American Political Science Review Vol. 106, No.2; May 2012: p.407-429 |
| Journal Source | American Political Science Review Vol. 106, No.2; May 2012: p.407-429 |
| Key Words | Optimal Public Policy ; Higher Investment ; Legislature Representatives |