I propose a political-economy model of optimal .scal unions where the threat of secession imposes a limit on .scal redistribution between regions. Fiscal transfers take place indirectly, through centralized .scal policy. I argue that the stability of .scal unions depends on the nature of...

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...

Social choice models usually assume that choice is among exogenously given and non decomposable alternatives. Often, on the contrary, choice is among objects that are constructed by individuals or institutions as complex bundles made of many interdependent components. In this paper we present a...