DP15099 Semi-flexible Majority Rules for Public Good Provision

Author(s): Hans Gersbach, Oriol Tejada
Publication Date: July 2020
Keyword(s): Voting - Utilitarianism - Implementation - Procedural democracy
JEL(s): C72, D70
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15099

We introduce semi-flexible majority rules for public good provision with private valuations. Such rules take the form of a two-stage, multiple-round voting mechanism where the output of the first stage is the default alternative for the second stage and the voting thresholds (a) vary with the proposal on the table and (b) require a qualified majority for final approval in the second stage. We show that the (detail-free) mechanism elicits the information about the valuations and uses it to implement the utilitarian optimal public-good level if valuations can be only high or low. This level is chosen after all potential socially optimal policies have been considered for voting. We explore ways to reduce the number of voting rounds and develop a compound mechanism when there are many types of citizens to approximate the optimal public-good level.