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Fractionalization and the Size of Government

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  • Jo Thori Lind

Abstract

This paper studies the joint effect of fractionalization and inequality on the size of government. Within a political economy model of tax determination, I study the effect of voters with a group-based social conscience, so they care more about the well-being of those belonging to their own group than the rest of the population. Under general assumptions, both fractionalization and group antagonism reduce the support for redistribution. Whereas within group inequality increases support for redistribution, inequality between groups have the opposite effect. All these results hold even if a poor group is in majority. Using a panel data set for the US constructed from micro data, I find support for the hypothesis that within race inequality increases and between group inequality decreases redistribution.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1000.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_1000

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Keywords: fractionalization; political economy; inequality; redistribution; race;

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Citations

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Cited by:
  1. Claudia Senik & Holger Stichnoth & Karine Van Der Straeten, 2008. "Immigration and natives' attitudes towards the welfare state: Evidence from the European Social Survey," PSE Working Papers halshs-00586256, HAL.
  2. Dominic Rohner, 2008. "Reputation, Group Structure and Social Tensions," HiCN Working Papers 40, Households in Conflict Network.
  3. Stichnoth, Holger & van der Straeten, Karine, 2009. "Ethnic diversity and attitudes towards redistribution: a review of the literature," ZEW Discussion Papers 09-036, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Holger Stichnoth, 2012. "Does immigration weaken natives’ support for the unemployed? Evidence from Germany," Public Choice, Springer, vol. 151(3), pages 631-654, June.
  5. Holger Stichnoth, 2010. "Does Immigration Weaken Natives' Support for the Welfare State?: Evidence from Germany," SOEPpapers on Multidisciplinary Panel Data Research 272, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Jordi Jofre-Monseny & Pilar Sorribas-Navarro & Javier Vázquez-Grenno, 2011. "Welfare spending and ethnic heterogeneity: evidence from a massive immigration wave," Working Papers 2011/34, Institut d'Economia de Barcelona (IEB).
  7. Karabarbounis, Loukas, 2010. "One dollar, one vote," MPRA Paper 25274, University Library of Munich, Germany.
  8. Yamamura, Eiji, 2012. "Decomposition of ethnic heterogeneity on growth," MPRA Paper 36352, University Library of Munich, Germany.
  9. Michael Wallerstein, 2004. "Behavioral Economics and Political Economy," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 30, pages 37-48.
  10. Desmet, Klaus & Ortuño, Ignacio & Weber, Shlomo, 2009. "Linguistic diversity and redistribution," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/4802, Universidad Carlos III de Madrid.
  11. Gilles Le Garrec, 2011. "Redistribution and the cultural transmission of the taste for fairness," Documents de Travail de l'OFCE 2011-24, Observatoire Francais des Conjonctures Economiques (OFCE).
  12. Lindqvist, Erik & Östling, Robert, 2006. "Identity and Redistribution," Working Paper Series in Economics and Finance 659, Stockholm School of Economics, revised 12 Jun 2007.
  13. Jo Thori Lind, 2005. "Why is there so little redistribution?," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 111-125.

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