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Why is there so little redistribution?

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  • Jo Thori Lind

Abstract

In democratic societies with skewed income distributions, simple political economy models predict that the poor will form a coalition to implement high taxes. I review this basic theory and some of its extensions. Then I discuss how we can test the model, and some common pitfalls, before I review the empirical findings. Generally, the empirical support for the theory is weak. I end with a review of selected parts of the literature that tries to explain this lack of empirical support.

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File URL: http://www.nopecjournal.org/NOPEC_2005_a06.pdf
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Bibliographic Info

Article provided by Nordic Journal of Political Economy in its journal Nordic Journal of Political Economy.

Volume (Year): 31 (2005)
Issue (Month): ()
Pages: 111-125

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Handle: RePEc:noj:journl:v:31:y:2005:p:111-125

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References

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  1. Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 465-90, May.
  2. Jose-Victor Rios-Rull & Per Krusell, 1999. "On the Size of U.S. Government: Political Economy in the Neoclassical Growth Model," American Economic Review, American Economic Association, vol. 89(5), pages 1156-1181, December.
  3. Lee, Woojin & Roemer, John E., 2006. "Racism and redistribution in the United States: A solution to the problem of American exceptionalism," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1027-1052, August.
  4. Lindert, Peter H., 1996. "What Limits Social Spending?," Explorations in Economic History, Elsevier, vol. 33(1), pages 1-34, January.
  5. Roland Bénabou & Efe A. Ok, 2001. "Social Mobility And The Demand For Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 447-487, May.
  6. Krusell, Per & Quadrini, Vincenzo & Rios-Rull, Jose-Victor, 1997. "Politico-economic equilibrium and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 243-272, January.
  7. Lindert,Peter H., 2009. "Growing Public," Cambridge Books, Cambridge University Press, number 9780521529174, October.
  8. Jo Thori Lind, 2010. "Do the Rich Vote Conservative Because They Are Rich?," Review of Economics and Institutions, Università di Perugia, vol. 1(2).
  9. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
  10. Alberto Alesina & Eliana La Ferrara, . "Preferences for Redistribution in the Land of Opportunities," Working Papers 178, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  11. Lind Jo Thori, 2007. "Does Permanent Income Determine the Vote?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-27, July.
  12. Persson, T. & Tabellini, G., 1993. "Is Inequality Harmful for Growth," Papers 537, Stockholm - International Economic Studies.
  13. Woojin Lee & John Roemer, 2005. "Values and Politics in the US: An Equilibrium Analysis of the 2004 Election," UMASS Amherst Economics Working Papers 2005-08, University of Massachusetts Amherst, Department of Economics.
  14. Borge, Lars-Erik & Rattso, J.Jorn, 2004. "Income distribution and tax structure: Empirical test of the Meltzer-Richard hypothesis," European Economic Review, Elsevier, vol. 48(4), pages 805-826, August.
  15. Ravallion, Martin & Lokshin, Michael, 2000. "Who wants to redistribute?: The tunnel effect in 1990s Russia," Journal of Public Economics, Elsevier, vol. 76(1), pages 87-104, April.
  16. John E. Roemer & Karine Van der Straeten, 2006. "The Political Economy of Xenophobia and Distribution: The Case of Denmark," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(2), pages 251-277, 07.
  17. Jo Thori Lind, 2003. "Fractionalization and the Size of Government," CESifo Working Paper Series 1000, CESifo Group Munich.
  18. Hongyi Li & Lyn Squire & Tao Zhang & Heng-fu Zou, 1999. "A Data Set on Income Distribution," CEMA Working Papers 575, China Economics and Management Academy, Central University of Finance and Economics.
  19. John Roemer, 2005. "Will democracy engender equality?," Economic Theory, Springer, vol. 25(1), pages 217-234, 01.
  20. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
  21. Moffitt, Robert & Ribar, David & Wilhelm, Mark, 1998. "The decline of welfare benefits in the U.S.: the role of wage inequality," Journal of Public Economics, Elsevier, vol. 68(3), pages 421-452, June.
  22. Romer, Thomas, 1975. "Individual welfare, majority voting, and the properties of a linear income tax," Journal of Public Economics, Elsevier, vol. 4(2), pages 163-185, February.
  23. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
  24. Roemer, John E., 1998. "Why the poor do not expropriate the rich: an old argument in new garb," Journal of Public Economics, Elsevier, vol. 70(3), pages 399-424, December.
  25. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March.
  26. Galasso, Vincenzo, 2003. "Redistribution and fairness: a note," European Journal of Political Economy, Elsevier, vol. 19(4), pages 885-892, November.
  27. La Ferrara, Eliana & Alesina, Alberto, 2005. "Preferences for Redistribution in the Land of Opportunities," Scholarly Articles 4552533, Harvard University Department of Economics.
  28. Milanovic, Branko, 2000. "The median-voter hypothesis, income inequality, and income redistribution: an empirical test with the required data," European Journal of Political Economy, Elsevier, vol. 16(3), pages 367-410, September.
  29. repec:cup:cbooks:9780521821759 is not listed on IDEAS
  30. Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
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