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Democracy and Equality Preferences

In: Inequality, Taxation and Intergenerational Transmission

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  • John A. Bishop
  • Haiyong Liu

Abstract

This chapter argues that in countries with well-functioning democracies most individuals should be “content” with the underlying income distribution. The authors derive this result from James Buchanan’s notion of a “fiscal constitution.” The authors test this hypothesis using data from the World Values Survey where respondents are asked whether “incomes should be more equal …, or do we need larger differences in income as incentives?” The authors’ empirical results indicate that the concentration of re-distributional preferences around the median response is positively related to the presence of a democratic voice.

Suggested Citation

  • John A. Bishop & Haiyong Liu, 2018. "Democracy and Equality Preferences," Research on Economic Inequality, in: Inequality, Taxation and Intergenerational Transmission, volume 26, pages 283-297, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:reinzz:s1049-258520180000026012
    DOI: 10.1108/S1049-258520180000026012
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    More about this item

    Keywords

    Income distribution; equality preferences; democracy; fiscal constitution redistribution; economic freedom; D31; D63; D72; H11;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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