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Inefficient redistribution and inefficient redistributive politics

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  • Dan Kovenock

    ()

  • Brian Roberson

    ()

Abstract

This paper examines the effect of inefficient redistribution in Myerson’s (1993) model of redistributive politics. Regardless of the absolute levels of the efficiency of political parties’ transfers to different voter segments, parties have incentive to (stochastically) shift resources away from voter segments with large relative efficiency gaps between the two parties’ transfers towards voter segments with smaller relative efficiency gaps. Because of this dependence on relative, and not absolute, levels of efficiency, the parties’ optimal strategies may lead to large discrepancies between the sum of the budgetary transfers and the sum of the effective transfers. At the extreme, in the spirit of Magee, Brock, and Young (1989), we obtain “black hole” inefficiency. When the model is extended to allow for loyal voter segments and loyalty to a party is positively related to the efficiency of that party’s transfers to the segment, the incentives leading to black hole inefficiency become even stronger.

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File URL: http://hdl.handle.net/10.1007/s11127-008-9392-9
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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 139 (2009)
Issue (Month): 3 (June)
Pages: 263-272

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Handle: RePEc:kap:pubcho:v:139:y:2009:i:3:p:263-272

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Web page: http://www.springerlink.com/link.asp?id=100332

Related research

Keywords: Redistributive politics; Inefficient redistribution; Black-hole inefficiency; Party loyalty; Colonel Blotto game;

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References

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  1. Nicolas Sahuguet & Nicola Persico, 2006. "Campaign spending regulation in a model of redistributive politics," Economic Theory, Springer, vol. 28(1), pages 95-124, 05.
  2. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
  3. Brian Roberson, 2006. "The Colonel Blotto game," Economic Theory, Springer, vol. 29(1), pages 1-24, September.
  4. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
  5. Baye, M. & Kovenock, D. & Vries, C. de, 1990. "The All-Pay Auction with Complete Information," Discussion Paper 1990-51, Tilburg University, Center for Economic Research.
  6. Clark, Derek J. & Riis, Christian, 2000. "Allocation efficiency in a competitive bribery game," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 109-124, May.
  7. Kovenock, Dan & Robertson, Brian, 2005. "Electoral Poaching and Party Identification," Purdue University Economics Working Papers 1178, Purdue University, Department of Economics.
  8. Acemoglu, Daron & Robinson, James A, 1999. "Inefficient Redistribution," CEPR Discussion Papers 2122, C.E.P.R. Discussion Papers.
  9. Lien, Da-Hsiang Donald, 1990. "Corruption and allocation efficiency," Journal of Development Economics, Elsevier, vol. 33(1), pages 153-164, July.
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Citations

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Cited by:
  1. Subhasish Chowdhury & Dan Kovenock & Roman Sheremeta, 2013. "An experimental investigation of Colonel Blotto games," Economic Theory, Springer, vol. 52(3), pages 833-861, April.
  2. Dan Kovenock J. & Brian Roberson, 2009. "Non-Partisan 'Get-Out-the-Vote' Efforts and Policy Outcomes," CESifo Working Paper Series 2815, CESifo Group Munich.
  3. Stefan Homburg, 2011. "Colonel Blotto und seine ökonomischen Anwendungen," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(1), pages 1-11, 02.
  4. Marcin Dziubiński, 2013. "Non-symmetric discrete General Lotto games," International Journal of Game Theory, Springer, vol. 42(4), pages 801-833, November.

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