Democratic decisions determine the allocation of resources through the public sector.
Holcombe uses the median voter model as a base, but goes on to develop a more general multidimensional model of democratic decision making that incorporates many theoretical developments of the past decade. He focuses upon the representative body of government and the fact that representatives can profit more from passing legislation to benefit special interests than from passing legislation in the general public interest.
Using these insights Holcombe develops a model that describes the allocative effects of making economic decisions by majority rule. The model describes a stable equilibrium outcome for majority rule decisions made in a multidimensional setting; it is a logical extension of the framework established in his well-received Public Finance and the Political Process.
Related books and articles