This paper studies majority voting outcomes fora specific class of two-dimensional policies. One policyinstrument influences efficiency and the other redistribution.Absent the political process, the two dimensions can beaddressed separately. With a two dimensional vote, the twoaspects will interact in a non-trivial way. The illustrativepolicy we consider, requires taxing an externality-generatinggood and determining a budgetary rule which specifies theproportions of the tax proceeds that go to wage earners and tocapital owners. We show: First, a sequential vote wherein thetax rate is determined first and the budgetary rule second,always possesses an equilibrium and that this equilibrium isthe median-endowed individual's most-preferred policy. Second,the reverse sequential choice implies that the median-endowedindividual may, but need not, be decisive. Third, the``Shepsle procedure'' also implies that the equilibrium is thepolicy most favored by the median individual. Fourth, thisequilibrium constitutes, under certain circumstances, theCondorcet winner for the unrestricted simultaneous votinggame.
KeywordsPublic Finance Specific Class Majority Vote Political Process Wage Earner
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