Democracy of 'Taxation-Redistribution' and Peacetime Budget Deficit

Gaidar Institute for Economic Policy Working Papers 0078

46 Pages Posted: 16 Dec 2013 Last revised: 3 Feb 2016

See all articles by Konstantin Yanovskiy

Konstantin Yanovskiy

Gaidar Institute for Economic Policy

Daniel Shestakov

National Research University Higher School of Economics

Sergei Zhavoronkov

Gaidar Institute for Economic Policy

Date Written: December 14, 2013

Abstract

The link between an introduction of the universal suffrage and the growth of government spending has been established in some literature (Meltzer, Richard, 1981, Aidt et al., 2006, Funk and Guthmann, 2006). In this article we try to identify a more detailed mechanism behind that link. So, we addressed to the conflict of interest of bureaucrats, and of the state subsidy beneficiaries. Historically the growth of government spending might be traced to the emergence of mainstream left parties, which openly stood in favor of the nanny state and government help from the cradle to the grave as a priority over the provision of pure public goods. Finally we check the hypothesis that the growth of government care correlates with the chronic illnesses of the modern state finance like budget deficit, state debt and inflation.

Keywords: Universal Suffrage, Left Parties, Budget Deficit, Conflict of Interest

JEL Classification: D72, D73, H62, N40

Suggested Citation

Yanovskiy, Konstantin and Shestakov, Daniel and Zhavoronkov, Sergei, Democracy of 'Taxation-Redistribution' and Peacetime Budget Deficit (December 14, 2013). Gaidar Institute for Economic Policy Working Papers 0078. Available at SSRN: https://ssrn.com/abstract=2367861 or http://dx.doi.org/10.2139/ssrn.2367861

Konstantin Yanovskiy (Contact Author)

Gaidar Institute for Economic Policy ( email )

Gazetny pereulok, 3-5
Moscow, 125993
Russia

Daniel Shestakov

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Sergei Zhavoronkov

Gaidar Institute for Economic Policy ( email )

3-5 Gazetny Lane
Moscow, 125009
Russia

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