Votingon the "Optimal" Size of Government
IMF Working Papers, October 1, 2000
Source details
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- Votingon the "Optimal" Size of Government
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Bibliographic details
- Authors: Jan-Peter Olters
- Published: October 1, 2000
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451858686.001
Summary of model and approach
- Views fiscal policies as the outcome of democratically resolved conflicts of households over public goods and taxes.
- Proposes the “economic model of politics”, a public choice approach that does not rely on social welfare functions.
- Derives a country’s overall budget endogenously from the political behavior of individuals.
- Explains electoral fluctuations on the basis of changes to individuals’ income and wealth.
- Describes political behavior in terms of individuals’ decisions regarding votes, abstentions, and party membership.
- Identifies a country’s wealth distribution as a crucial variable affecting economic stability and the government’s size relative to output.
Key findings and implications
- The size of government relative to output can be explained endogenously within a public choice framework rather than imposed by a social welfare function.
- Individual-level income and wealth changes generate observable electoral fluctuations and thus influence fiscal policy outcomes.
- Political participation choices (voting, abstention, party membership) are central mechanisms linking household preferences to aggregate fiscal outcomes.
- Wealth distribution is a central determinant of both economic stability and the equilibrium size of government.
Analytical focus and topics covered
- Capital income
- Consumption
- Expenditure
- Income
- Income tax systems
Research and publication metadata (for reference in overlays)
- Working Paper by Jan-Peter Olters
- Date: October 1, 2000
Jan-Peter Olters. "Votingon the "Optimal" Size of Government", IMF Working Papers 2000, 174 (2000), accessed 9/17/2026, https://doi.org/10.5089/9781451858686.001
Content in this bundle
- Voting on the "Optimal" Size of Government - WP/00/174