Democratic Mechanisms: Double Majority Rules and Flexible Agenda Costs

Hans Gersbach

No 5013, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop democratic mechanisms where individual utilities are not observable by other people at the legislative stage. We show that an appropriate combination of three rules can yield efficient provision of public projects: first, flexible and double majority rules where the size of the majority depends on the proposal and verifiable parameters and taxed and non-taxed individuals need to support the proposal; second, flexible agenda costs where the agenda-setter has to pay a certain amount of money if his proposal does not generate enough supporting votes; third, a ban on subsidies. We provide a rationale why double majority rules are used in practice. We also show that higher degrees of uncertainty about project parameters can make it easier to achieve first-best allocations and that universal equal treatment with regard to taxation is undesirable.

Keywords: Democratic constitutions; Unobservable utilities; Double majority rules; Flexible agenda cost rules (search for similar items in EconPapers)
JEL-codes: D62 D72 H40 (search for similar items in EconPapers)
Date: 2005-04
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: Democratic Mechanisms: Double Majority Rules and Flexible Agenda Costs (2002)
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