Baron, D. (1991), Bargaining Majoritarian Incentives, Pork Barrel Programs and Procedural Control

Note similarity to Baron and Ferejohn (1989):

• Multi-lateral,
• Bargaining
• Divide the "pie" (not the dollar)
• Non-cooperative
• Use of stationary equilibrium
• Divisibility and transferability of benefits.

Looks at cases where B<T (benefits less than costs).

Programs are characterized by B, T (total benefits and total taxes). P (programs) are characterized by [math]B/T, P\in[0,\inf][/math].

• [math]B: {b|b_{i}\gt 0, i=1,2,3,...,n, \sum b_{i}\leq B}[/math]
• T is always distributed equally among n districts so [math]t_{i}=T/n[/math].
• Proposals are fully characterized by [math]b\in B[/math] and net benefits are [math]z_{i}=b_{i}-T/n[/math].
• Payoffs are discounted: [math]\delta^{\tau}z_{i}=U_{i}(z,\tau)[/math]. Extensive form is the same as before for closed rule.

Stationarity implies members are paid their continuation value in equilibrium in exchange for their votes. [math]\delta v(g,t), \forall t\in\Tau[/math]

Proposition 1: With closed rule the stationary EQM has the following properties:

• (i) Inefficient pork barrel programs will be adopted. Inefficiency is increasing in [math]n[/math]
• (ii) Possible set of programs is increasing in [math]\delta[/math].
• (iiii) coalitions are minimum winning.
• (iv) There is proposal power.
• (v) 1st proposal is always selected.