Does Abstention Matter?
A significant portion of James Buchanan’s academic career has been devoted to the study and design of constraints that limit the power of government.2 Some of the studies deal with political constraints such as constitutional limits to taxation.3 Others deal with market-based constraints in which citizens’ ability to “vote with their feet”, even to secede, limits the ability of government to redistribute wealth. For example in Buchanan and Faith (1987), the government is constrained in its ability to expropriate resources from the citizenry by the possibility of secession. The lower the cost to secessionists of setting up a new government, the larger the size of the seceding group, the smaller the tax base in the original jurisdiction, and the lower the government’s tax rate. The more difficult is secession the higher are tax rates.
KeywordsEquilibrium Allocation Favored Group Government Benefit Constitutional Economic Constitutional Limit
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