Optimal Democratic Mechanisms: Should Minorities Propose First?

Abstract

We study optimal democratic procedures for public project provision, financing, and redistribution under democratic constraints. We show that the four features that define the following procedure are essential for optimality: (i) there are two proposal-making rounds followed by a voting round (with the majority rule); (ii) a member of the minority proposes first and a member of the majority proposes second;(iii) taxes are uniform;(iv) subsidies are fixed for agenda-setters. Our insights rationalize the principle according to which minorities should always propose first.

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

JEL Classification: D72, H40