Abstract

Abstract The author proposes a two-round process called minority voting to allocate public projects in a polity. In the first round, a society decides by a simple majority decision whether to provide the public project. If the proposal in the first round is rejected, the process ends. Otherwise the process continues, but only the members of the minority keep agenda and voting rights for the second round, in which the financing scheme is determined. In the second round, the unanimity rule or the simple majority rule is applied. The author provides a first pass of relative welfare comparisons between minority voting and simple majority voting and outline the research program.

Highlights

  • In this paper we propose a new way of allocating and financing public projects collectively in a two-stage process

  • We focus on the case where the unanimity rule is applied in the second stage under minority voting

  • We provide a first round of relative welfare comparisons between minority voting and simple majority voting

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Summary

Introduction

In this paper we propose a new way of allocating and financing public projects collectively in a two-stage process. If a majority favors the public project, the process continues, but only the members of the minority keep the agenda and voting rights for the second stage, in which the financing scheme is determined. Minority voting with the unanimity rule in the second stage ensures that only Pareto improvements occur and that three standard inefficiencies in democratic decision-making are avoided: inefficient projects are neither proposed nor adopted; inefficient redistribution proposals are neither proposed nor adopted; when proposed, efficient projects are not rejected. We provide a first round of relative welfare comparisons between minority voting and simple majority voting. Our proposal is aimed at resolving the tyranny of the majority problem by giving an emerging minority the exclusive right to decide about the financing scheme for a public project that a society has previously approved.

Model and Constitutional Principles
Socially Efficient Solutions
Simple Majority Voting
Minority Voting
Tax Protection Rule
Equilibria under Simple Majority Voting
General Characterization of Equilibria
Financing
Overall Equilibria
Welfare Comparisons
Further Aspects of Welfare
Example
Conclusion

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