Mandatory versus Discretionary Spending: The Status Quo Effect
研究强制性支出(如医保)与自由裁量支出两种制度对公共品供给的影响,发现强制性支出能提高公共品支出,且在特定条件下帕累托优于自由裁量支出。
Do mandatory spending programs such as Medicare improve efficiency? We analyze a model with two parties allocating a fixed budget to a public good and private transfers each period over an infinite horizon. We compare two institutions that differ in whether public good spending is discretionary or mandatory. We model mandatory spending as an endogenous status quo since it is enacted by law and remains in effect until changed. Mandatory programs result in higher public good spending; furthermore, they ex ante Pareto dominate discretionary programs when parties are patient, persistence of power is low, and polarization is low.