IDEAS home Printed from https://ideas.repec.org/p/mde/wpaper/0045.html
   My bibliography  Save this paper

Public Debt Stabilization: Redistributive Delays Versus Preemptive Anticipations

Author

Listed:
  • Paulo Júlio

    (Gabinete de Estratégia e Estudos, Portuguese Ministry of Economy and Employment)

Abstract

This article illustrates and formalizes the conditions under which majority voting can lead to either delays or anticipations in public debt stabilizations. Under the assumptions of proportional taxation and universal public expenditures, we present an intertemporal version of the “Meltzer-Richard” result, which captures the difficulty of controlling increases in public expenditures. In the benchmark model delays are endogenous and have redistributive effects, but when a relatively rich minority makes the decisions, we may observe anticipation in public debt stabilization.

Suggested Citation

  • Paulo Júlio, 2011. "Public Debt Stabilization: Redistributive Delays Versus Preemptive Anticipations," GEE Papers 0045, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Dec 2011.
    • Handle: RePEc:mde:wpaper:0045
    as

    Download full text from publisher

    File URL: https://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_45.pdf
    File Function: First version, 2011
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David P. Myatt, 2005. "Instant Exit from the Asymmetric War of Attrition," Economics Series Working Papers 160, University of Oxford, Department of Economics.
    2. Martinelli, Cesar & Escorza, Raul, 2007. "When are stabilizations delayed? Alesina-Drazen revisited," European Economic Review, Elsevier, vol. 51(5), pages 1223-1245, July.
    3. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
    4. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    5. Philippe De Donder & Jean Hindriks, 1998. "The political economy of targeting," Public Choice, Springer, vol. 95(1), pages 177-200, April.
    6. Alesina, Alberto & Drazen, Allan, 1991. "Why Are Stabilizations Delayed?," American Economic Review, American Economic Association, vol. 81(5), pages 1170-1188, December.
    7. Gelbach Jonah B. & Pritchett Lant, 2002. "Is More for the Poor Less for the Poor? The Politics of Means-Tested Targeting," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-28, July.
    8. Enrico Spolaore, 2004. "Adjustments in Different Government Systems," Economics and Politics, Wiley Blackwell, vol. 16(2), pages 117-146, July.
    9. Romer, Thomas, 1975. "Individual welfare, majority voting, and the properties of a linear income tax," Journal of Public Economics, Elsevier, vol. 4(2), pages 163-185, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Micael Castanheira & Gaëtan Nicodème & Paola Profeta, 2012. "On the political economics of tax reforms: survey and empirical assessment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(4), pages 598-624, August.
    2. Micael Castanheira & Gaëtan Nicodème & Paola Profeta, 2012. "On the political economics of tax reforms: survey and empirical assessment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(4), pages 598-624, August.
    3. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    4. Imrohoroglu, Ayse & Merlo, Antonio & Rupert, Peter, 2000. "On the Political Economy of Income Redistribution and Crime," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 1-25, February.
    5. Lourdes ROJAS RUBIO, 2022. "Inequality, Corruption and Support for Democracy," THEMA Working Papers 2022-20, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    6. Dan Anderberg, 2007. "Inefficient households and the mix of government spending," Public Choice, Springer, vol. 131(1), pages 127-140, April.
    7. Creedy, John & Moslehi, Solmaz, 2009. "Modelling the composition of government expenditure in democracies," European Journal of Political Economy, Elsevier, vol. 25(1), pages 42-55, March.
    8. Dorsch, Michael T. & Maarek, Paul, 2020. "Economic downturns, inequality, and democratic improvements," European Journal of Political Economy, Elsevier, vol. 62(C).
    9. An, Zhiyong, 2013. "An alternative approach to income taxation," Economic Modelling, Elsevier, vol. 30(C), pages 875-878.
    10. Lora, Eduardo, 2008. "El futuro de los pactos fiscales en América Latina," Coediciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1310.
    11. Dorsch Michael T. & Maarek Paul, 2014. "A Note on Economic Inequality and Democratization," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(4), pages 599-610, December.
    12. Ryo Arawatari & Tetsuo Ono, 2011. "Old-age Social Security vs. Forward Intergenerational Public Goods Provision," Discussion Papers in Economics and Business 11-26-Rev.2, Osaka University, Graduate School of Economics, revised Aug 2013.
    13. Gilles Saint‐Paul & Davide Ticchi & Andrea Vindigni, 2021. "Engineering crises: Favoritism and strategic fiscal indiscipline," Economics and Politics, Wiley Blackwell, vol. 33(3), pages 583-610, November.
    14. Jo Thori Lind & Dominic Rohner, 2017. "Knowledge is Power: A Theory of Information, Income and Welfare Spending," Economica, London School of Economics and Political Science, vol. 84(336), pages 611-646, October.
    15. Partha Gangopadhyay & Shyam Nath, 2001. "Bargaining, Coalitions and Local Expenditure," Urban Studies, Urban Studies Journal Limited, vol. 38(13), pages 2379-2391, December.
    16. Berliant, Marcus & Gouveia, Miguel, 2022. "On the Political Economy of Nonlinear Income Taxation," MPRA Paper 113140, University Library of Munich, Germany.
    17. Guizzo Altube, Matías & Scartascini, Carlos & Tommasi, Mariano, 2023. "The Political Economy of Redistribution and (in)Efficiency in Latin America and the Caribbean," IDB Publications (Working Papers) 13194, Inter-American Development Bank.
    18. Ryo Arawatari & Tetsuo Ono, 2015. "Redistributive Politics And Government Debt In A Borrowing-Constrained Economy," Bulletin of Economic Research, Wiley Blackwell, vol. 67(1), pages 83-103, January.
    19. Takanori Sumino, 2016. "Level or Concentration? A Cross-national Analysis of Public Attitudes Towards Taxation Policies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(3), pages 1115-1134, December.
    20. Christian Bredemeier, 2014. "Imperfect information and the Meltzer-Richard hypothesis," Public Choice, Springer, vol. 159(3), pages 561-576, June.

    More about this item

    Keywords

    Stabilization delays; Economic adjustments; Economic reforms; Majority voting;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mde:wpaper:0045. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joana Almodovar (email available below). General contact details of provider: https://edirc.repec.org/data/geegvpt.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.