A voting paradox and the deficit: Arrow's impossibility theorem at work or why a legislature full of stubborn conservatives would run a deficit.
Item
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Title
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A voting paradox and the deficit: Arrow's impossibility theorem at work or why a legislature full of stubborn conservatives would run a deficit.
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Identifier
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AAI9618117
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identifier
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9618117
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Creator
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Widerquist, Karl Phillip.
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Contributor
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Adviser: Sali Neftci
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Date
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1996
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Language
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English
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Publisher
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City University of New York.
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Subject
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Economics, Theory | Political Science, General
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Abstract
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This paper uses a game-theoretic approach to demonstrate that a voting paradox could create deficit bias in government budget decisions. Many political economy models show deficit bias. This model has the advantage of having all three of the following characteristics. (1) The deficit is unintentional. (2) All agents in the model are rational. (3) The deficit is the result of the inability of government to resolve disagreement among citizens about the composition of government spending. Alessina and Tabellini (1989, 1990) demonstrate that a deficit results from citizens' disagreement about the composition of government spending. However, this disagreement is combined with the willingness of the current government to leave a deficit in order to limit the spending options of future governments, making the deficit is ex post intentional. This paper, however, demonstrates that if preferences are sufficiently diverse, an Arrow type voting paradox could create contradictory political pressure. The government's inability to resolve this conflict efficiently creates the deficit, rather than the desire of the current government to create a deficit.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
