Bundling and the Unanimity Rule

26 Pages Posted: 4 Apr 2005

See all articles by Ulrich Erlenmaier

Ulrich Erlenmaier

University of Heidelberg - Alfred Weber Institute for Economics

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)

Date Written: December 2004

Abstract

In this Paper, we design democratic constitutions that can transcend the shortcomings of the unanimity rule. The constitution embeds the unanimity rule in a set of virtue-supporting principles: (a) broad packages with many public projects (bundling) are allowed, but can only be proposed once in a legislative term; (b) the person who designs the package is also taxed at the highest proposed rate; and (c) subsidies are forbidden. We show that such democratic constitutions can yield efficient public project provision.

Keywords: Unanimity rule, bundling, constitutions, provision of public projects, amendment rules

JEL Classification: D62, D70, H40

Suggested Citation

Erlenmaier, Ulrich and Gersbach, Hans, Bundling and the Unanimity Rule (December 2004). CEPR Discussion Paper No. 4808. Available at SSRN: https://ssrn.com/abstract=697961

Ulrich Erlenmaier

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany
+49 6221 542958 (Phone)
+49 6221 543578 (Fax)

Hans Gersbach (Contact Author)

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

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