Majoritarian exploitation of the fiscal commons: general taxes–differential transfers

Do majoritarian democracies overexploit the general tax base, akin to the tragedy of the commons? Or, apart from any consideration of efficiency norms, are there “natural” forces in majoritarian politics that keep tax rates below revenue-maximizing limits? This paper formulates the fiscal process th...

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Published in:European Journal of Political Economy 2004-03, Vol.20 (1), p.73-90
Main Authors: Buchanan, James M., Yoon, Yong J.
Format: Article
Language:English
Subjects:
Coalitions
Democracy
Economics
Externalities
Fiscal commons
Fiscal Policy
Fiscal transfer
Laffer curve
Majoritarian democracy
Majority Groups
Membership externality
Political economy
Political science
Revenue
Tax transfer
Taxation
Taxes
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description Do majoritarian democracies overexploit the general tax base, akin to the tragedy of the commons? Or, apart from any consideration of efficiency norms, are there “natural” forces in majoritarian politics that keep tax rates below revenue-maximizing limits? This paper formulates the fiscal process through the metaphor of the commons and analyzes the equilibrium that emerges in settings where differing majority coalitions may operate simultaneously to place charges on the general taxable capacity of the economy. The presence of a “membership externality,” emergent from the necessary intersections of members among separate majority coalitions, acts to limit fiscal exploitation, even in the pure transfer settings.
doi_str_mv 10.1016/j.ejpoleco.2003.05.001
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source International Bibliography of the Social Sciences (IBSS); ScienceDirect Journals; Worldwide Political Science Abstracts
subjects Coalitions
Democracy
Economics
Externalities
Fiscal commons
Fiscal Policy
Fiscal transfer
Laffer curve
Majoritarian democracy
Majority Groups
Membership externality
Political economy
Political science
Revenue
Tax transfer
Taxation
Taxes
title Majoritarian exploitation of the fiscal commons: general taxes–differential transfers
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