ABSTRACT
The first disturbance is a change in the level of unemployment in the economy. The problem will be discussed on the assumption that citizensor at least a significant fraction of them—include the level of unemployment in their utility function. To put the matter differently, with the extension of the franchise, the task of the government in designing discriminatory policies is made more difficult since the number of utility functions that have to be taken into account and not subjected to coercion through negative external effects is increased. A completely new bundle of policies will be required if the governing party is to remain in office. Note that if group III citizens are poorer than those of group II, one is likely to observe, with the extension of the franchise, an increase in the size of the public sector; while if group III citizens are wealthier, the opposite is likely to occur.
