This paper studies the optimal design of fiscal limits in the context of a simple political economy model. The model features a single politician and a representative voter. The politician is responsible for choosing the level of public spending for the voter but may be biased in favor of...

This paper measures the effect of state-level supermajority requirements for tax increases on tax rates. Unobserved attitudes towards taxation tend to influence both the adoption of supermajority requirements and tax policy. Consequently, one cannot distinguish between the effect of these...

This paper presents a dynamic political economy theory of public spending, taxation and debt. Policy choices are made by a legislature consisting of representatives elected by geographically-defined districts. The legislature can raise revenues via a distortionary income tax and by borrowing....