Agenda control and budget size: An extension of the Romer-Rosenthal model

Abstract

Recent work in public choice theory has examined ways in which control of the agenda might be used by interested parties to manipulate voting outcomes (Plott and Levine, 1978; Romer and Rosenthal, 1978; Mackay and Weaver, 1979, 1981). The agenda can be defined as the set of rules under which collective decisions are to be made. In the relevant cases for discussion here, these rules impose constraints on the set of options which can actually be put before the voters. There is potential value in controlling the agenda because the actual collective choice from a restricted set of options may differ from that which might emerge if voters were allowed to consider a more inclusive set. The discussion in this paper is concerned with a particular type of agenda control first examined by Romer and Rosenthal (Romer and Rosenthal, 1979). In their model, voters are confronted with a single proposed level of spending on a particular public service and asked to approve or disapprove. A simple majority is required for approval. If the proposed budget fails to win majority support, then the level of spending approved for the preceding year is automatically adopted for the current year. The choice before the voters, in other words, is between the new budget proposal and the status quo. Suppose a group of relatively high demanders of the public service control the choice of what budget proposal is actually placed before the voters. For example, the annual budget proposal might be submitted by the bureau charged with supplying the service and said bureau might be dominated by Niskanen type budget-maximizing bureaucrats. Under these circumstances those in control of the agenda will seek to submit the largest possible budget which can win majority approval over the status quo. Romer and Rosenthal contributed two key insights into this budget procedure. First, if the status quo budget is below that most preferred by the median voter, then the maximum new budget which can win majority approval is in excess of the median voter's optimum. Second, the smaller is the status quo budget relative to that preferred by the median voter, the larger is the maximum budget which can be successfully proposed as an alternative to the status quo. Consider Figure 1 in which is depicted the ordinal ranking of the median voter of various spending levels. If S' is the status quo budget, then B' is the maximum