We discuss two essential problems of the political economy of public finances: The principal agent problem between voters and elected politicians and the common pool problem arising from the fact that money drawn from a general tax fund is used to pay for policies targeting more or less narrow groups in society. Three institutional mechanisms exist to deal with these problems, ex-ante rules con...

This paper develops a theory of inequality and the social contract aiming to explain how countries with similar economic and political “fundamentals” can sustain such different systems of social insurance, fiscal redistribution, and education finance as those of the United States and Western Europe. With imperfect credit and insurance markets some redistributive policies can improve ex ante wel...

We develop an endogenous growth model driven by externalities from both private and public capital. The government levies distortionary taxation to finance a publicly provided consumption good and public infrastructure. Firms face adjustment costs. We compare the optimal and time-consistent policies in a linearquadratic approximation of the model. Although the time-consistent equilibrium is sub...

Background Epidemiological evidence on the social determinants of health inequity is well-advanced, but considerably less attention has been given to evaluating the impact of public policies addressing those social determinants. Methodological challenges to produce evidence on policy outcomes present a significant barrier to mobilising policy actions for health equities. This review aims to exa...

We built a model of regulation for non point source water pollution through non linear taxation/subsidisation of agricultural production. Farms are heterogeneous along two dimensions: their ability to transform inputs into final production, and the available area they possess. We propose a framework for describing the ability of farmers, the cost and the emission joint functions from a populati...

Preventive policy measures such as bailouts often pass parliament very narrowly. We present a model of asymmetric information between politicians and voters which rationalizes this narrow parliamentary outcome. A successful preventive policy impedes the verifi cation of its own necessity. When policy intervention is necessary but voters disagree ex-ante, individual politicians have an incentive...

Results derived from empirical analyses on the stability of climate coalitions are usually very sensitive to the large uncertainties associated with the benefits and costs of climate policies. This paper provides the methodology of Stability Likelihood (SL) that links uncertainties about benefits and costs of climate change to the stability of coalitions. We show that the concept of SL improves...

Periodic elections are the main instrument through which voters can hold politicians accountable. From this perspective term limits, which restrict voters’ ability to reward politicians with re-election, appear counterproductive. We show that despite the disciplining effect of elections, term limits can be ex ante welfare improving from the perspective of voters. By reducing the value of holdin...

This paper considers an issue that has received little attention in the literature on health state evaluation: the relevance of the ex ante/ex post distinction in the assessment of quality of life. Ex post evaluations are based on experience of the health state being evaluated. Ex ante evaluations are made in anticipation of actually experiencing the health state, and are able to capture source...