We propose a two-stage process called minority voting to allocate public projects in a polity. In the first period, a society decides by a simple majority decision whether to provide the public project. If the proposal in the first period is rejected, the process ends. Otherwise the process...

The author proposes a two-round process called minority voting to allocate public projects in a polity. In the first round, a society decides by a simple majority decision whether to provide the public project. If the proposal in the first round is rejected, the process ends. Otherwise the...

We examine whether and how democratic procedures can achieve socially desirable public good provision in the presence of profound uncertainty about the benefits of public goods, i.e., when citizens are able to identify the distribution of benefits only if they aggregate their private...

We study how to efficiently motivate policy-makers to solve political multitask problems. Political multi-task problems typically have outcomes that are difficult to measure. Moreover, there are conflicts among citizens about optimal policies and the agents have the power to tax the citizens to...

We study the political economy of bank capital regulation from a positive and normative perspective. In a general equilibrium setting, capital requirements and lobbying contributions are determined as the outcome of bargaining between banks and politicians. We show that bankers and politicians...

As the performance of long-term projects is not observable in the short run politicians may pander to public opinion. To solve this problem, we propose a triple mechanism involving political information markets, reelection threshold contracts, and democratic elections. An information market is...

Vote-buying is widely used by parties in developing countries to influence the outcome of elections. We examine the impact of vote-buying on growth. We consider a model with a poverty trap where redistribution can promote growth. We show that vote-buying contributes to the persistence of poverty...

We examine the provision of public projects under separate tax and subsidy rules. We find that tax rules separated from project cum subsidy decisions exhibit several advantages when incentive problems of the agenda-setter are taken into account. In particular, tax rules may prevent the proposal...

In this paper we examine the impact of tax contracts as a novel institution on elections, policies, and welfare. We consider a political game in which three parties compete to form the government. Parties have policy preferences about the level of public-good provision and benefit from perks...

We present a model of elections in which interest group donations allow candidates to shift policy positions. We show that if donations were prohibited, then a unique equilibrium regarding the position choices of candidates would exist. With unrestricted financing of political campaigns two...