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Democracy, redistributive taxation and the private provision of public goods

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  • Markussen, Thomas

Abstract

The 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 Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 27 (2011)
Issue (Month): 1 (March)
Pages: 201-213

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Handle: RePEc:eee:poleco:v:27:y:2011:i:1:p:201-213

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Web page: http://www.elsevier.com/locate/inca/505544

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Keywords: Public goods Political economy Inequality Taxation Higher education;

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