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occurs since bargaining power is endogenous, and generically causes inefficiency. Interestingly, redistribution arises … decreasing efficiency, which becomes more severe as the centralized budget increases. We also analyze partial ex-ante commitment … through alternative decision-making institutions: Both majority rule and exogenous tax rules can improve efficiency. …
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Specialized theoretical and empirical research should in principle be embedded in a unified framework that identifies the relevant interactions among different phenomena, enables an appropriate matching of policy instruments to objectives, and grounds normative analysis in individuals' utilities...
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