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Ideology, Tactics, and Efficiency in Redistributive Politics

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Dixit, Avinash
Londregan, John

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Abstract

We model the electoral politics of redistribution. Taxation has efficiency and equity effects. Citizens and parties care about inequality in addition to their private concerns for consumption and votes respectively. In equilibrium, each party's strategy can be implemented by a proportional income tax at a rate common to all groups, and group-specific pork-barrel transfers proportionate to each group's political clout. The proportion coefficients chosen by each party reflect a compromise between its ideology and power hunger. Our results relate to "Director's Law", which says that redistributive politics favors middle classes at the expense of both rich and poor.

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Paper provided by CESifo GmbH in its series CESifo Working Paper Series with number CESifo Working Paper No. 137.

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Date of creation: 1997
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Handle: RePEc:ces:ceswps:_137

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  1. Johansson, Eva, 1999. "Intergovernmental Grants as a Tactical Instrument: Some Empirical Evidence from Swedish Municipalities," Working Paper Series 1999:10, Uppsala University, Department of Economics. [Downloadable!]
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  2. Ragnar Torvik & James A. Robinson & Mario Chacón, 2006. "When is Democracy an Equilibrium?: Theory and Evidence from Colombia's La Violencia," Working Paper Series 7106, Department of Economics, Norwegian University of Science and Technology. [Downloadable!]
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  3. Khemani, Stuti, 2002. "Federal politics and budget deficits: evidence from the states of India," Policy Research Working Paper Series 2915, The World Bank. [Downloadable!]
  4. Sanjit Dhami, 2001. "The Political Economy of Redistribution Under Asymmetric Information," Game Theory and Information 0108001, EconWPA. [Downloadable!]
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  5. Albert Solé-Ollé & Pilar Sorribas-Navarro, 2008. "Does partisan alignment affect the electoral reward of intergovernmental transfers?," Working Papers 2008/2, Institut d'Economia de Barcelona (IEB). [Downloadable!]
  6. Germa Bel & Antonio Miralles, 2004. "Machiavellian Taxation? The political economy of public service financing," Public Economics 0409013, EconWPA. [Downloadable!]
  7. Robinson, James A & Verdier, Thierry, 2002. "The Political Economy of Clientelism," CEPR Discussion Papers 3205, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  8. Sanjay Jain & Sharun W. Mukand, 2003. "Redistributive Promises and the Adoption of Economic Reform," American Economic Review, American Economic Association, vol. 93(1), pages 256-264, March. [Downloadable!] (restricted)
  9. Hector J. Villarreal & Ricardo Cantú, . "Do Walmartians Ruled? The political power of an emerging middle class in Mexico," Working Papers 20081, Escuela de Graduados en Administración Pública y Políticas Públicas, Campus Monterrey, revised Jun 2007. [Downloadable!]
  10. Blomquist, Sören & Christiansen, Vidar, 2000. "Why Politicians Favor Redheads - A Theory of Tactical Horizontal Redistribution," Working Paper Series 2000:10, Uppsala University, Department of Economics. [Downloadable!]
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  11. Khemani, Stuti, 2003. "Partisan politics and intergovernmental transfers in India," Policy Research Working Paper Series 3016, The World Bank. [Downloadable!]
  12. Achim Kemmerling & Andreas Stephan, 2001. "The Contribution of Local Public Infrastructure to Private Productivity and Its Political-Economy: Evidence from a Panel of Large German Cities," CIG Working Papers FS IV 01-14, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG). [Downloadable!]
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  13. Inequality and Political Consensus, 1999. "Grüner, Hans Peter," Discussion Paper Serie A 591, University of Bonn, Germany. [Downloadable!]
  14. Grüner, Hans Peter, 2003. "Inequality and Political Consensus," CEPR Discussion Papers 4159, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  15. Rainald Borck, 2005. "Voting, Inequality, and Redistribution," Discussion Papers of DIW Berlin 503, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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  16. Antoni Castells & Daniel Montolio & Albert Solé, 2006. "Infrastructure investment across Spanish regions: determinants and calculation of an expenditure needs index," Hacienda Pública Española, IEF, vol. 127(3), pages 23-54, September. [Downloadable!]
  17. Dahlberg, Matz & Johansson, Eva, 1999. "On the Vote Purchasing Behavior of Incumbent Governments," Working Paper Series 1999:24, Uppsala University, Department of Economics. [Downloadable!]
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  18. MARTIMORT, David & DE DONDER, Philippe & DE VILLEMEUR, Etienne, 2003. "An Incomplete Contract Perspective on Public Good Provision," IDEI Working Papers 212, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
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  19. Henning Bohn & Charles Stuart, 2003. "Voting and Nonlinear Taxes in a Stylized Representative Democracy," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  20. Blomquist, Sören & Christiansen, Vidar, 1998. "The Political Economy of Publicly Provided Private Goods," Working Paper Series 1998:14, Uppsala University, Department of Economics. [Downloadable!]
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