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Politique fiscale, chasse aux rentes et croissance en régime d'incertitude électorale: théorie et résultats pour l'OCDE .
Author(s) -
Angelopoulos Konstantinos,
Economides George
Publication year - 2008
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1540-5982.2008.00508.x
Subject(s) - incentive , economics , rent seeking , fiscal policy , government (linguistics) , government spending , work (physics) , construct (python library) , power (physics) , politics , empirical evidence , public economics , microeconomics , macroeconomics , market economy , welfare , mechanical engineering , linguistics , philosophy , programming language , political science , computer science , law , engineering , physics , epistemology , quantum mechanics
. We construct a general equilibrium model of economic growth and optimally chosen fiscal policy, in which individuals compete with each other for a share of government spending and two political parties alternate in power according to exogenous electoral uncertainty. The main prediction is that uncertainty about remaining in power results in increased fiscal spending, which in turn distorts incentives by pushing individuals away from productive work to rent‐seeking activities; then, distorted incentives hurt growth. This scenario receives empirical support in a dataset of 25 OECD countries over the period 1982–96. In particular, uncertainty about remaining in power leads to larger government shares in GDP, which in turn exert an adverse effect on the ICRG index measuring incentives and this is bad for growth.