Efficiency, Welfare, and Political Competition

Felix Bierbrauer and Pierre Boyer

No 4814, CESifo Working Paper Series from CESifo

Abstract: We study political competition in an environment in which voters have private information about their preferences. Our framework covers models of income taxation, public-goods provision or publicly provided private goods. Politicians are vote-share-maximizers. They can propose any policy that is resource-feasible and incentive-compatible. They can also offer special favors to subsets of the electorate. We prove two main results. First, in a symmetric equilibrium, policies are surplus-maximizing and hence first-best Pareto-efficient. Second, there is a surplus-maximizing policy that wins a majority against any welfare-maximizing policy. Thus, in our model, policies that trade off equity and efficiency considerations are politically infeasible.

Keywords: political competition; asymmetric information; public goods; non-linear income taxation; redistributive politics (search for similar items in EconPapers)
JEL-codes: C72 D72 D82 H41 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Efficiency, Welfare, and Political Competition (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4814

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