The empirical literature investigating the role of key features of local governments regarding decisions on consolidation tends to use a dummy dependent variable that takes 1 if both adjacent local governments decide to merge and 0 if one of them does not approve consolidation. Under this...

We construct a general equilibrium model in which a pay-as- you-go social security system can be adopted and sustained as a political and economic equilibrium. We analyze the welfare implications of this system and compare general equilibrium welfare measures to the commonly used notion of...