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Targeting and political support for welfare spending

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Author Info

  • Karl Ove Moene
  • Michael Wallerstein

Abstract

This paper investigates the political support for social assistance policies in a model in which incomes are stochastic (so that welfare policies have an insurance benefit) and unequal ex ante (so that welfare policies have a redistributive effect). With self-interested voting, narrow targeting may so reduce the probability of receiving benefits for the majority that the majority prefers to eliminate benefits altogether, even though the cost of narrowly targeted benefits is close to zero. In contrast, a majority of self-interested voters always supports positive welfare benefits when the policy is targeted sufficiently broadly. If voters are somewhat altruistic, the impact of targeting on political support for welfare spending diminishes but does not disappear. Copyright Springer-Verlag Berlin Heidelberg 2001

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Bibliographic Info

Article provided by Springer in its journal Economics of Governance.

Volume (Year): 2 (2001)
Issue (Month): 1 (03)
Pages: 3-24

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Handle: RePEc:spr:ecogov:v:2:y:2001:i:1:p:3-24

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Related research

Keywords: Key words: welfare state; voting; targeting; universal spending; JEL classification: H1; D3;

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References

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  1. Thomas Piketty, 1994. "Social Mobility and Redistributive Politics," Working papers 94-15, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Karl Ove Moene & Michael Wallerstein, . "Political Support for Targeted versus Universalistic Welfare Policies," IPR working papers 97-2, Institute for Policy Resarch at Northwestern University.
  3. Sinn, Hans-Werner, 1995. "A Theory of the Welfare State," CEPR Discussion Papers 1278, C.E.P.R. Discussion Papers.
  4. Philippe De Donder & Jean Hindriks, 1998. "The political economy of targeting," Public Choice, Springer, vol. 95(1), pages 177-200, April.
  5. Besley, Timothy & Coate, Stephen, 1995. "The Design of Income Maintenance Programmes," Review of Economic Studies, Wiley Blackwell, vol. 62(2), pages 187-221, April.
  6. Barr, Nicholas, 1992. "Economic Theory and the Welfare State: A Survey and Interpretation," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 741-803, June.
  7. CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, 1998. "On the political sustainability of redistributive social insurance systems," CORE Discussion Papers 1998038, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December.
  9. Sandmo, Agnar, 1991. "Economists and the welfare state," European Economic Review, Elsevier, vol. 35(2-3), pages 213-239, April.
  10. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
  11. Jon Elster, 1996. "Transmutation and Misrepresentation," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 23, pages 3-23.
  12. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
  13. Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February.
  14. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October.
  15. Besley, Timothy, 1990. "Means Testing versus Universal Provision in Poverty Alleviation Programmes," Economica, London School of Economics and Political Science, vol. 57(225), pages 119-29, February.
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Cited by:
  1. Sanghamitra Bandyopadhyay & Joan Esteban, 2007. "Redistributive Taxation and Public Expenditures," Economics Series Working Papers 366, University of Oxford, Department of Economics.
  2. Sanghamitra Bandyopadhyay & Joan Esteban, 2009. "Redistributive Taxation, Public Expenditure, and Size of Governent," Working Papers 416, Barcelona Graduate School of Economics.
  3. Schüring, Esther & Gassmann, Franziska, 2012. "Whom to target: an obvious choice?," MERIT Working Papers 028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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