Democracy, redistributive taxation and the private provision of public goods
AbstractThe paper studies in a simple, Downsian model of political competition the private provision of public goods embedded in a system of democracy and redistributive taxation. Results show that the positive effect of inequality on production of public goods, to which Olson (1965) pointed, is weakened and might even be reversed in this context. Also, the median voter may choose a negative tax rate, even if he or she is poorer than the mean, in order to stimulate production of public goods. The relevance of the model is illustrated with an application to the financing of higher education.
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Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Political Economy.
Volume (Year): 27 (2011)
Issue (Month): 1 (March)
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Web page: http://www.elsevier.com/locate/inca/505544
Public goods Political economy Inequality Taxation Higher education;
Other versions of this item:
- Thomas Markussen, 2010. "Democracy, Redistributive Taxation and the Private Provision of Public Goods," Discussion Papers 10-09, University of Copenhagen. Department of Economics.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
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