Rebuilding the Democracy of the Taxpayer

57 Pages Posted: 19 May 2013

See all articles by Konstantin Yanovskiy

Konstantin Yanovskiy

Gaidar Institute for Economic Policy

Sergey Shulgin

Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research

Ilia Zatcovetsky

Samuel Neaman Institute for Advanced Studies in Science and Technology

Sergei Zhavoronkov

Gaidar Institute for Economic Policy

Date Written: May 18, 2013

Abstract

The voter - bureaucrat is locked into a situation of a conflict of interests: as a conscientious citizen, he or she should support optimal expenditure levels for providing certain public goods, but as a person whose wellbeing and career depend on the volume of expenditures for providing public goods, he or she is interested in supporting volumes and prices which obviously exceed the levels acceptable for most citizens of the state. The bureaucrat is also interested in obtaining excess control and regulatory empowerment and authorization. It follows that a conscientious and enlightened functionary should submit a statement about a conflict of interests, and abstain from voting until retirement or demotion.

A large and growing group of voters is made up of “professional” recipients of aid. It follows that persons, whose interests include the redistribution of resources of the taxpayers in their own favor, also have no moral right to make decisions by voting during elections.

This applies in part also to those entrepreneurs who derive most of their income from the budget.

Another grounding factor is the historical statistics of state budget balancing (the dynamics of state debt) and inflation (see Appendix 4: The History of Inflation and Budgetary Deficit after the Introduction of Universal Suffrage). In the age before universal suffrage, problems of financing were almost always an outcome of military cataclysms or other external shocks of a similar magnitude. In the age of universal suffrage, budgetary deficit, growing state debt, and inflation have become the norm.

Keywords: Universal suffrage, conflict of interest, taxpayers' democracy, pure and mixed public goods

JEL Classification: D72, D73, H41, N40, P16

Suggested Citation

Yanovskiy, Konstantin and Shulgin, Sergey and Zatcovetsky, Ilia and Zhavoronkov, Sergei, Rebuilding the Democracy of the Taxpayer (May 18, 2013). Available at SSRN: https://ssrn.com/abstract=2266956 or http://dx.doi.org/10.2139/ssrn.2266956

Konstantin Yanovskiy (Contact Author)

Gaidar Institute for Economic Policy ( email )

Gazetny pereulok, 3-5
Moscow, 125993
Russia

Sergey Shulgin

Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research ( email )

Russia

Ilia Zatcovetsky

Samuel Neaman Institute for Advanced Studies in Science and Technology ( email )

Technion, Haifa 32000
Israel

Sergei Zhavoronkov

Gaidar Institute for Economic Policy ( email )

3-5 Gazetny Lane
Moscow, 125009
Russia

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