The paper examines the impact of income inequality and mobility on income redistribution in a modified median voter model where redistributive conflict takes place both between educational groups and age-groups. The effects of inequality and mobility are not unambiguous but depend on factors...

I develop a political economy theory of dynamic fiscal competition via public spending and debt. With internationally mobile capital, strategic policies generate two cross-border externalities that voters in each country fail to internalize: (1) an increase in public spending that bolsters...

In this chapter I provide an overview of the political economy of taxation in democratic states by considering the three most important issues in the field: (1) the evolution of the power to tax in (what are now) the mature constitutional democracies; (2) the nature and determinants of modern...

This paper develops an expanded framework for social planning in which the existence of coercion is explicitly acknowledged. Key issues concern the precise definition of coercion for individuals and in the aggregate, its difference from redistribution, and its incorporation into normative...

We augment a standard tax model by concerns about tax equity: people get upset when labour is taxed more heavily than capital. Even the slightest concern for tax equity invalidates the common recommendation for small open economies that capital should remain tax-exempt. This holds for exogenous...

We develop a model that combines competitive exchange of private commodities across endogenously formed groups with public good provision and global collective decisions. There is a tension between local and global collective decisions. In particular, we show that group formation and collective...

This paper provides evidence of efficient taxation of groups with heterogeneous levels of tax morale. We set up an optimal income tax model where high tax morale implies a high subjective cost of evading taxes. The model predicts that nice guys finish last: groups with higher tax morale will be...

Public Choice is the merger between political science and economics. In the introductory sections of this survey it is investigated what we can expect from the logic of public choice. How far is it able to produce consistent results? Is public choice consistent with liberty? What can be done to...

This paper provides a simple model to explain effect of political alignment between different tiers of government on policy choices and election outcomes. We derive precise predictions that, as long as voters attribute most of the credit for providing public goods to the local government: (i)...