Tax contracts and elections

摘要: In this paper we examine the impact of tax contracts as a novel institution on elections, policies, and welfare. We consider political game in which three parties compete to form government voters may behave strategically. Parties have policy preferences about level public-good provision benefit from perks when office. A raises taxes for both purposes. show that yield moderate policies lead lower by avoiding formation grand coalitions order win government. Moreover, polarized societies they unambiguously improve welfare median voter.