First Proposal to Minorities or How to Channel the Say in Politics

76 Pages Posted: 5 Dec 2019

See all articles by Hans Gersbach

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Stephan Imhof

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Oriol Tejada

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Date Written: January 20, 2017

Abstract

We examine optimal democratic procedures for public project provision, financing, and redistribution, and provide a game-theoretic foundation of how to channel the say in politics. We consider a large and heterogeneous political decision body and show that first-best outcomes are obtained by a procedure involving two proposal-making rounds, uniform taxation, the simple majority rule, fixed subsidies for agenda-setters, and the minority's right to move first. We explore the robustness of the result and consider applications of our procedure. For instance, the result rationalizes those rules of democracies granting minorities the right to initiate collective decisions. We further show that the above procedure constitutes the unique minimal form of political competition ensuring first-best outcomes under democratic constraints.

Keywords: constitutional design; public project provision; subsidies; majority rule

JEL Classification: D72, H40

Suggested Citation

Gersbach, Hans and Imhof, Stephan and Tejada, Oriol, First Proposal to Minorities or How to Channel the Say in Politics (January 20, 2017). Available at SSRN: https://ssrn.com/abstract=3490527 or http://dx.doi.org/10.2139/ssrn.3490527

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Stephan Imhof

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Oriol Tejada (Contact Author)

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
41446329693 (Phone)

HOME PAGE: http://www.cer.ethz.ch/mip/people/toriol

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