NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Voting on the Budget Deficit

Alberto Alesina, Guido Tabellini

NBER Working Paper No. 2759
Issued in November 1988
NBER Program(s):   ME

This paper analyzes a model in which different rational individuals vote over the composition and time profile of public spending. Potential disagreement between current and future majorities generates instability in the social choice function that aggregates individual preferences. In equilibrium a majority of the voters may favor a budget deficit. The size of the deficit under majority rule tends to be larger the greater is the polarization between current and potential future majorities. The paper also shows that the ex-ante efficient equilibrium of this model involves a balanced budget. A balanced budget amendment, however, is not durable under majority rule.

download in pdf format
   (282 K)

download in djvu format
   (177 K)

email paper

This paper is available as PDF (282 K) or DjVu (177 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2759

Published: American Economic Review, vol. 80, no. 1, pp. 37-49, March 1990.

Users who downloaded this paper also downloaded these:
Alesina and Perotti w4637 The Political Economy of Budget Deficits
Feldstein The Budget Deficit And The Dollar
Barro w2685 The Ricardian Approach to Budget Deficits
Alesina and Perotti Budget Deficits and Budget Institutions
Alesina and Tabellini w2308 A Positive Theory of Fiscal Deficits and Government Debt in a Democracy
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us