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The effect of political representation on the geographic distribution of income: Evidence using Belgian data

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  • Jennes, Geert
  • Persyn, Damiaan

Abstract

This paper investigates the role of political representation in explaining geographical variation in social security and income tax transfers. To quantify the causal link going from political representation to transfers, we identify two sets of exogenous changes in political representation and use an instrumental variable approach. Using Belgian data for the 1995–2010 period, we find that transfers to inhabitants of a particular electoral district increase significantly with every extra federal minister originating from that electoral district. Given that social security and income tax transfers appear to be largely formula-based this result is surprising.

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  • Jennes, Geert & Persyn, Damiaan, 2015. "The effect of political representation on the geographic distribution of income: Evidence using Belgian data," European Journal of Political Economy, Elsevier, vol. 37(C), pages 178-194.
    • Handle: RePEc:eee:poleco:v:37:y:2015:i:c:p:178-194
    DOI: 10.1016/j.ejpoleco.2014.11.006
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    More about this item

    Keywords

    Distributive politics; Income redistribution; Fiscal transfers; Political representation;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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