Arrow's "impossibility" and similar classical theorems are usually proved for an unrestricted domain of preference profiles. Recent work extends Arrow's theorem to various restricted but "saturating" domains of privately oriented, continuous, (strictly) convex, and (strictly) monotone "economic...

March 1997 <p> Arrow's ``impossibility'' and similar classical theorems are usually proved for an unrestricted domain of preference profiles. Recent work extends Arrow's theorem to various restricted but ``saturating'' domains of privately oriented, continuous, (strictly) convex, and (strictly)...</p>

In this paper we consider a model of the country with heterogeneous population and examine compensation schemes that may prevent a threat of secession by dissatisfied regions. We show that horizontal imbalances are combatable with secession-proof compensation schemes that entail a degree of...