Majoritarian Delays

This paper illustrates how delayed debt stabilizations can arise in a society without any emerging conict of interests among its members. We argue that, under a majority voting rule, the economy may gener-ate excessive levels of government spending and larger debts over time, and that this delay is increasing in income inequality. The intuition for this result is simple: a majority of citizens may \u85nd in delaying sta-bilizations a way to increase government expenditures, transferring in this way resources from the richest to the poorest citizens in the econ-omy. This process may explain the upward trend and the di ¢ culty to reduce public expenditures, the so called "ratchet e¤ect." JEL classi\u85cation: D72, E6