Political Economics: Explaining Economic Policy / Edition 1

Political Economics: Explaining Economic Policy / Edition 1

by Torsten Persson, Guido Tabellini
     
 

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ISBN-10: 0262161958

ISBN-13: 9780262161954

Pub. Date: 08/14/2000

Publisher: MIT Press

What determines the size and form of redistributive programs, the extent and type of public goods provision, the burden of taxation across alternative tax bases, the size of government deficits, and the stance of monetary policy during the course of business and electoral cycles? A large and rapidly growing literature in political economics attempts to answer these

Overview

What determines the size and form of redistributive programs, the extent and type of public goods provision, the burden of taxation across alternative tax bases, the size of government deficits, and the stance of monetary policy during the course of business and electoral cycles? A large and rapidly growing literature in political economics attempts to answer these questions. But so far there is little consensus on the answers and disagreement on the appropriate mode of analysis.

Combining the best of three separate traditions—the theory of macroeconomic policy, public choice, and rational choice in political science—Torsten Persson and Guido Tabellini suggest a unified approach to the field. As in modern macroeconomics, individual citizens behave rationally, their preferences over economic outcomes inducing preferences over policy. As in public choice, the delegation of policy decisions to elected representatives may give rise to agency problems between voters and politicians. And, as in rational choice, political institutions shape the procedures for setting policy and electing politicians. The authors outline a common method of analysis, establish several new results, and identify the main outstanding problems.

Product Details

ISBN-13:
9780262161954
Publisher:
MIT Press
Publication date:
08/14/2000
Series:
Zeuthen Lectures Series
Edition description:
First Edition
Pages:
553
Product dimensions:
7.00(w) x 9.00(h) x 1.20(d)

Related Subjects

Table of Contents

Series Foreword xiii
Foreword xv
Preface xvii
General Introduction
1(14)
Economic Policy
6(4)
Politics
10(4)
Concluding Remarks
14(1)
I TOOLS OF POLITICAL ECONOMICS 15(100)
Preferences and Institutions
19(28)
A General Policy Problem
19(2)
Restricting Preferences
21(7)
Restricting Institutions
28(12)
Discussion
40(1)
Notes on the Literature
41(1)
Problems
41(6)
Electoral Competition
47(22)
A Simple Model of Public Finance
48(1)
Downsian Electoral Competition
49(2)
Median-Voter Equilibria
51(1)
Probabilistic Voting
52(6)
Lobbying
58(4)
Discussion
62(1)
Notes on the Literature
63(1)
Problems
64(5)
Agency
69(28)
Efficient Electoral Competition
70(1)
Inefficient Electoral Competition
71(2)
Enforceability, Verifiability, and Observability
73(4)
Electoral Accountability
77(4)
Career Concerns
81(6)
Discussion
87(2)
Notes on the Literature
89(2)
Problems
91(6)
Partisan Politicians
97(18)
Policy Convergence
97(2)
Policy Divergence
99(2)
Endogenous Candidates
101(3)
Legislative Bargaining
104(4)
Discussion
108(1)
Notes on the Literature
109(1)
Problems
110(5)
II REDISTRIBUTIVE POLITICS 115(86)
General-Interest Politics
117(42)
General Transfers
118(5)
Pensions
123(9)
Regional Transfers
132(8)
Unemployment Insurance
140(9)
Discussion
149(2)
Notes on the Literature
151(3)
Problems
154(5)
Special-Interest Politics
159(42)
A Model of Local Public Goods
161(3)
Legislative Bargaining
164(7)
Lobbying
171(4)
Electoral Competition
175(5)
Interactions
180(11)
Discussion
191(1)
Notes on the Literature
192(3)
Problems
195(6)
III COMPARATIVE POLITICS 201(74)
Electoral Rules and Electoral Competition
205(20)
The Economic Model
206(1)
The Politics of Electoral Competition
207(3)
Single-District (Proportional) Elections
210(2)
Multiple-District (Majoritarian) Elections
212(3)
Broad versus Targeted Redistribution
215(3)
Discussion
218(2)
Notes on the Literature
220(1)
Problems
221(4)
Institutions and Accountability
225(26)
Electoral Rules and Career Concerns
226(8)
Electoral Rules and Accountability
234(5)
Separation of Powers
239(6)
Notes on the Literature
245(1)
Problems
246(5)
Political Regimes
251(24)
Policy Choices in a Simple Legislature
253(6)
Presidential-Congressional Regimes
259(3)
Parliamentary Regimes
262(4)
Discussion
266(2)
Notes on the Literature
268(1)
Problems
269(6)
IV DYNAMIC POLITICS 275(118)
Dynamic Policy Problems
277(28)
Analyzing Dynamic Policy Games
278(8)
Examples
286(12)
Discussion
298(1)
Notes on the Literature
299(1)
Problems
300(5)
Capital Taxation
305(40)
A Simple Model of Dynamic Taxation
306(1)
Credibility
307(10)
Politics
317(8)
Tax Competition
325(11)
Discussion
336(2)
Notes on the Literature
338(1)
Problems
339(6)
Public Debt
345(28)
A Simple Model of Public Debt
346(2)
The Dynamic Common-Pool Problem
348(3)
Political Instability
351(10)
Delayed Stabilizations
361(3)
Debt and Intergenerational Politics
364(2)
Discussion
366(1)
Notes on the Literature
367(2)
Problems
369(4)
Growth
373(20)
Income Inequality and Growth
374(3)
Political Instability and Growth
377(2)
Special Interests, Rents, and Growth
379(5)
Other Political Determinants of Growth
384(1)
Discussion
385(1)
Notes on the Literature
386(1)
Problems
387(6)
V MONETARY POLITICS 393(96)
Credibility of Monetary Policy
397(22)
A Simple Model of Monetary Policy
397(2)
Ex Ante Optimality
399(2)
Credibility
401(4)
Reputation
405(3)
Dynamics
408(4)
Notes on the Literature
412(2)
Problems
414(5)
Electoral Cycles
419(16)
Career Concerns and Political Business Cycles
420(6)
Partisan Cycles
426(4)
Notes on the Literature
430(1)
Problems
431(4)
Institutions and Incentives
435(24)
Simple Rules and Escape Clauses
436(5)
Central Bank Independence
441(4)
Inflation Targets and Contracts
445(7)
Notes on the Literature
452(1)
Problems
453(6)
International Policy Coordination
459(20)
A Simple Two-Country Model
460(2)
Incentives
462(5)
Institutions
467(6)
Discussion
473(1)
Notes on the Literature
474(1)
Problems
475(4)
What Next?
479(10)
Some Positive Questions
479(4)
Analytical Issues
483(5)
Concluding Remarks
488(1)
References 489(26)
Author Index 515(6)
Subject Index 521

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