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Economics seminars - Simone Meraglia

"Kings and Parliaments: Ruling by Building Consensus"

Catégorie : conférence/cours/séminaire (spécialisé)
Date : 13/11/2018 16:00 - 13/11/2018 18:00
Lieu : Salle C. Joset (4ème étage) - Fac. Sc. économiques

Dear all,

You are cordially invited to the following seminar co-organized by CERPE, CRED and CEREFIM at the Department of Economics in Namur.

Hope to see you all,

"Kings and Parliaments: Ruling by Building Consensus"

Speaker: Simone Meraglia

(University of Exeter Business School)

Date and time: Tuesday, November 13, 2018 at 4pm

Room 401, Rempart de la Vierge 8, Namur



We investigate the conditions under which a principal delegates authority over the financing of a public project to an assembly of agents. The principal is privately informed about the value of a public project which, if financed, affects his payoff as well as the agents’. Each agent receives a private and noisy signal about the value of the project. The principal is cash-constrained, and the agents choose whether to invest their endowments in the public project or in their own private projects. The principal’s inability to grab the agents’ resources means she is tempted to exaggerate the value of the public project. We show that the principal may find it optimal to implement an assembly in which agents exchange their private information and decide whether to finance the public project. We study the conditions under which this mechanism dominates alternative mechanisms in which the principal either (i) relies on the agents’ purely voluntary contributions or (ii) signals the projects profitability at a cost. We apply this model to the case of medieval parliaments. We argue that towns’ self-governance made (i) contributions to the king’s public projects voluntary and (ii) difficult for kings to unilaterally appropriate towns’ wealth. The latter issue made towns more concerned about the profitability of public projects sponsored by increasingly cash-constrained rulers. Rulers therefore resorted to national assemblies as a way to raise more resources for socially efficient projects.


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