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We develop a theory of endogenous political entrenchment in a simple two-party dynamic model of income redistribution … commit to provide, and therefore may help offsetting a potential future aggregate ideological shock averse to the left … theory for constitutionally legislated term limits is also discussed. The theory sheds light on why left-wing parties or …
Persistent link: https://www.econbiz.de/10009535765
Economists recommend to partly redistribute gains to losers from a structural reform, which in many cases may be required for making the reform politically viable. However, taxation is distortionary. Then, it is unclear that compensatory transfers can support a Pareto-improving reform. This...
Persistent link: https://www.econbiz.de/10011951457