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American Economic Journal: Economic Policy: Vol. 3 No. 1 (February 2011)

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The Cabals of a Few or the Confusion of a Multitude: The Institutional Trade-Off between Representation and Governance

Article Citation

Brooks, Leah, Justin Phillips, and Maxim Sinitsyn. 2011. "The Cabals of a Few or the Confusion of a Multitude: The Institutional Trade-Off between Representation and Governance." American Economic Journal: Economic Policy, 3(1): 1-24.

DOI: 10.1257/pol.3.1.1

Abstract

Our model illustrates how political institutions trade off between the competing goals of representation and governance, where governance is the responsiveness of an institution to a single pivotal voter. We use exogenous variation from the 30-year history of the federal Community Development Block Grant program to identify this trade-off. Cities with more representative governments—those with larger city councils—use more grant funds to supplement city revenues rather than implementing tax cuts, thereby moving policy further away from the governance ideal. In sum, more representative government is not without cost. (JEL D72, H71, R50)

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Authors

Brooks, Leah (U Toronto)
Phillips, Justin (Columbia U)
Sinitsyn, Maxim (McGill U)

JEL Classifications

D72: Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
H71: State and Local Taxation, Subsidies, and Revenue
R50: Regional Government Analysis: General

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