The Voter's Blunt Tool

46 Pages Posted: 24 Aug 2012 Last revised: 22 Aug 2013

See all articles by T. Renee Bowen

T. Renee Bowen

University of California, San Diego; National Bureau of Economic Research; Center for Commerce and Diplomacy (CCD)

Cecilia Mo

Vanderbilt University

Date Written: August 15, 2013

Abstract

When do voters win? In this paper we derive conditions under which a democracy will produce policies that favor the voter over special interests. We show that increasing political competition, increasing office holding benefits, decreasing potential rents to firms and increasing the salience of policy implies improved policies for the representative voter. We also find a positive interaction between the effect of political competition and office holding benefits. Panel data from the United States supports the model’s predictions. The ratio of taxes paid by individuals relative to corporations is decreasing with governor salary (a proxy for office holding benefits), protest activity (a proxy for policy salience), and political competition. Additionally, minimum wages are increasing with governor salary, protest activity, and political competition.

Keywords: Voting, Lobbying, Tax, Minimum Wage, Governor Salary, Protests, Political Competition

JEL Classification: D72, D78, H71, H76

Suggested Citation

Bowen, T. Renee and Mo, Cecilia, The Voter's Blunt Tool (August 15, 2013). Stanford University Graduate School of Business Research Paper No. 2115, Available at SSRN: https://ssrn.com/abstract=2135011 or http://dx.doi.org/10.2139/ssrn.2135011

T. Renee Bowen (Contact Author)

University of California, San Diego ( email )

9500 Gilman Drive #0519
La Jolla, CA 92093-0519
United States

HOME PAGE: http://https://sites.google.com/site/tamarareneebowenlyn/

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Center for Commerce and Diplomacy (CCD) ( email )

9500 Gilman Dr.
La Jolla, CA 92093

HOME PAGE: http://https://ccd.ucsd.edu/

Cecilia Mo

Vanderbilt University ( email )

2301 Vanderbilt Place
Nashville, TN 37240
United States

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