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Income Redistribution and Public-Good Provision in a Diverse Society

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  • Selim Jürgen Ergun

Abstract

I analyze the postelectoral coalition formation process in a two-dimensional political environment. The two dimensions are the degree of a proportional tax rate and the degree of a group-specific public good. Parties are office-motivated and care instrumentally about policy. I analyze when stable coalitions exist and obtain that for that to occur office benefits should exceed a certain level. I analyze how this critical level and the set of policies implemented are affected by the income levels and the degree of diversity. For both office- and policy-motivated parties the same result holds, but the critical level might be lower for the latter.

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Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 167 (2011)
Issue (Month): 2 (June)
Pages: 291-313

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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201106)167:2_291:irappi_2.0.tx_2-6

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  1. Enriqueta Aragonés, 2007. "The Key Party in the Catalan Government," UFAE and IAE Working Papers 681.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  2. Enriqueta Aragonès, 2007. "Government formation in a two dimensional policy space," International Journal of Game Theory, Springer, vol. 35(2), pages 151-184, January.
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