Danes love sharing, caring and communal singing, Auld Lang Syne, 99 bottles of Carlsberg, and public welfare for all. This sounds too good to be true - and it is. Like every great fairy tale, the model welfare state has a dark side. Carsten Jensen, tax-funded welfare authority at Aarhus...

Politicians may pander to public opinion and may renounce undertaking beneficial long-term projects. To alleviate this problem, we introduce a triple mechanism involving political information markets, reelection threshold contracts, and democratic elections. An information market is used to...