Supermajority Rule, the Law of 1/n, and Government Spending: A Synthesis

29 Pages Posted: 25 May 2017

See all articles by Paul Pecorino

Paul Pecorino

University of Alabama - Department of Economics, Finance and Legal Studies

Date Written: May 25, 2017

Abstract

I develop models in which a minimum winning coalition decides on the level of government spending, where the Coase theorem holds amongst members of the winning coalition. An increase in the supermajority requirement has potentially conflicting effects on spending. A higher requirement increases the tax price internalized by the minimum winning coalition, but also increases the number of districts included in this coalition. I develop separate models in which the spending in question consists of (i) a nonexcludable good, (ii) a distributive consumption good, (iii) infrastructure spending and (iv) a transfer payment. A supermajority rule has no effect on spending for nonexcludable goods and ambiguous effects on spending for distributive projects and infrastructure spending. An increase supermajority rule does unambiguously reduce transfer spending. I also relate the supermajority rule to the law of 1/n. Under one particular conception of the law of 1/n, an increase in the number of districts n has precisely the same effect on overall expenditure as a decrease in the supermajority requirement. Thus, the ambiguous spending effects stemming from supermajority rule carry over into this version of the law of 1/n.

Keywords: Supermajority voting requirement, Law of 1/n, Government Spending

JEL Classification: D72, H40, D78

Suggested Citation

Pecorino, Paul, Supermajority Rule, the Law of 1/n, and Government Spending: A Synthesis (May 25, 2017). Available at SSRN: https://ssrn.com/abstract=2973927 or http://dx.doi.org/10.2139/ssrn.2973927

Paul Pecorino (Contact Author)

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-0379 (Phone)
205-348-0590 (Fax)

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