ECONOMY

chapter 25
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STRUCTURE AND
COHERENCE IN
THE POLITICAL
ECONOMY OF
PUBLIC FINANCE
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stanley l. winer
walter hettich
No one can quarrel with the requirement that the budget plan should be
designed to maximize welfare. . .
(Musgrave and Peacock 1958, xi)
At first sight it might be argued that anyone who set himself up as a judge
and wished to establish standards for the distribution of expenditure or
amounts of revenue different from those approved by Parliament, must
belongtooneofthreecategories:eitherhemustbementallytheequal
of that average intelligence [in Parliament], in which case he could not
∗ For helpful comments we thank Timothy Besley, Tom Borcherding, Roger Congleton, Amihai
Glazer, Randall Holcombe, Kai Konrad, Gary Miller, Paul Rothstein, Dan Usher, and editors Barry
Weingast and Don Wittman, as well as participants in seminars at Carleton University, the Claremont
Graduate School, and the University of Western Ontario. Winer’s research was supported by a
Canada-United States Fulbright Scholarship during the 2003–4 academic year and by the Canada
Research Chair program. The hospitality extended to Winer by the Department of Economics and the
Center for the Study of Democracy at UC Irvine is also gratefully acknowledged. Errors and omissions
remain the responsibility of the authors.