Seminar Papers, Institute for International Economic Studies, Stockholm University
No 726:
Endogenous Constitutions
Davide Ticchi ()
and Andrea Vindigni
Abstract: We present a theory of the choice of alternative
democratic constitutions, a majoritarian or a consensual one, in a n
unequal society. A majoritarian democracy redistributes resources from the
collectivity toward relatively few people, and has a relatively small
government and low level of taxation. A consensual democracy redistributes
resources toward a broader spectrum of social groups but also have a larger
government and a higher level of taxation. A consensual system turns out to
be preferred by the society when ex ante income inequality is relatively
low, while a majoritarian system is chosen when income inequality is
relatively high. Moreover, we obtain that consensual democracies should be
expected to be ruled more often by center-left coalitions. Finally, our
model also provides a new rationale, based on the endogeneity of the
political system, of the positive or absent (rather than negative)
association between equality and redistribution transpiring from the
cross-sectional evidence of developed countries presented in some recent
studies. Some historical and empirical evidence supporting our results is
provided.
Keywords: Endogenous Constitutions; Consensual Democracy; Majoritarian Democracy; Inequality; Heterogeneity; Redistribution; (follow links to similar papers)
JEL-Codes: D31; D72; P16; (follow links to similar papers)
96 pages, November 1, 2003
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Ticchi, Davide and Andrea Vindigni, (2010), 'Endogenous Constitutions', Economic Journal, Vol. 120, March, No. 543, pages 1-39
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