The consequences of commitment failure have been missing from debates about the decentralized regulation of automobile emissions and other sources of local consumption externalities. Even when the direct effects of such products are limited to a single jurisdiction, the presence of increasing...

Cost-benefit analyses typically ignore the importance of relative position. That is, they do not take into account the possibility that people value particular goods, services, or other determinants of well-being through comparisons with others. Robert Frank and Cass Sunstein have recently...

A long-standing question in public economics is why governments do not rely on lump-sum taxes to satisfy revenue requirements. The previous literature has found that lump-sum taxation may result in ruinous political conflict, but has not disentangled the effects of restrictions on the efficiency...

While horizontal equity is an influential norm, its proper role in tax analysis is unclear. Policies that "treat equals equally" are generally not optimal. When taxpayers lobby, however, maintaining horizontal equity reduces the resources used to influence policy. If the reduction in influence...

Combining rent-seeking and menu auction models allows the study of efficiency in a political economy where lobbying creates rents that politicians expend resources to obtain. Policy choices, lobbying, and rent-seeking are determined endogenously. When all interests lobby, equilibrium local...