Abstract - Economics Research Reports


Endogenous Majority Rules with Changing Preferences

By Mattias Polborn (University of Western Ontario)

December, 2000

This paper provides a new explanation why several US states have implemented supermajority requirements for tax increases. We model a dynamic and stochastic OLG economy where individual preferences depend on age and change over time in a systematic way. In this setting, we show that the first population of voters will choose a supermajority rule in order to influence the outcomes of future elections. We explore the robustness of the basic model and also find some empirical support for predictions derived from the model.

JEL Classification: D72
Keywords: supermajority; taxation; constitution; overlapping generations; political economy