Advanced Search
MyIDEAS: Login to save this paper or follow this series

A Theory of Ethnic Diversity and Income Distribution

Contents:

Author Info

  • Fusako Tsuchimoto

Abstract

In this paper, how the two dimensions of heterogeneity of people in society, income disparity and ethnic diversity, affect the reallocation of the income is examined. Specifically a legislative bargaining model is constructed to investigate how the political parties whose platforms are distinguished by ethnicity and income group, form a coalition and enter a government to implement their preferred fiscal policy is analyzed. The result of the model suggests, that the preferred partner for coalition is the group with smaller population size (cheaper to buy) and lower income level (easier to tax). Combined with the idea of Kuznets curve, this result suggests that in poor countries ethnic coalitions tend to occur and in the middle and high income countries, class coalitions are likely to occur. Further I extend the model such that the member in the coalition gets per-capita transfer equally to overcome the shortcomings of the conventional model. The extended model shows that if the rich is in the majority, forming an oversized coalition might be the optimal strategy, which is consistent with empirical findings in some developed countries, such as Denmark or Sweden.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cerge-ei.cz/pdf/wp/Wp395.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp395.

as in new window
Length:
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:cer:papers:wp395

Contact details of provider:
Postal: P.O. Box 882, Politickych veznu 7, 111 21 Praha 1
Phone: (+420) 224 005 123
Fax: (+420) 224 005 333
Email:
Web page: http://www.cerge-ei.cz
More information through EDIRC

Related research

Keywords: Political Economy; diversity; legislative bargaining.;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Tim Besley & Stephen Coate, . ""An Economic Model of Representative Democracy''," CARESS Working Papres, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences 95-02, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
  2. David P. Baron & Daniel Diermeier, 2001. "Elections, Governments, And Parliaments In Proportional Representation Systems," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 116(3), pages 933-967, August.
  3. Bolton, Patrick & Roland, Gérard, 1995. "The Break up of Nations: A Political Economy Analysis," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1225, C.E.P.R. Discussion Papers.
  4. Fernández, Raquel & Levy, Gilat, 2008. "Diversity and redistribution," Journal of Public Economics, Elsevier, Elsevier, vol. 92(5-6), pages 925-943, June.
  5. Daniel Diermeier & Antonio Merlo, 1998. "Government Turnover in Parliamentary Democracies," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1232, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers, Harvard - Institute for International Development 536, Harvard - Institute for International Development.
  7. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(3), pages 681-712, August.
  8. Marina Azzimonti Renzo, 2004. "On the dynamic inefficiency of governments," 2004 Meeting Papers, Society for Economic Dynamics 228, Society for Economic Dynamics.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cer:papers:wp395. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jana Koudelkova).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.