Racism and Redistribution in the United States: A Solution to the Problem of American Exceptionalism
AbstractThe two main political parties in the United States put forth policies on redistribution and on issues pertaining directly to race. We argue that redistributive politics in America can be fully understood only by taking account of the interconnection between these issues, and the effects of political competition upon the multi-dimensional party platforms. We identify two mechanisms through which racism among American voters decreases the degree of redistribution that would otherwise obtain. Many authors have suggested that voter racism decreases the degree of redistribution due to an anti-solidarity effect: that (some) voters oppose government transfer payments to minorities whom they view as undeserving. We point to a second effect as well: that some voters who desire redistribution nevertheless vote for the anti-redistributive party (the Republicans) because that party's position on the race issue is more consonant with their own, and this, too, decreases the degree of redistribution. We call this the policy bundle effect. The effect of voter racism on redistribution is the sum of these two effects. We propose a formal model of multi-dimensional political competition that enables us to estimate the magnitude of these two effects, and estimate the model for the period 1976-1992. We numerically compute that during this period voter racism reduced the income tax rate by 11-18 percentage points; the total effect decomposes about equally into the two sub-effects. We also find that the Democratic vote share is 5-38 percentage points lower than it would have been, absent racism.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1462.
Length: 83 pages
Date of creation: Jun 2004
Date of revision:
Publication status: Published in Journal of Public Economics (2006), 90: 1027-1052
Note: CFP 1190.
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Other versions of this item:
- Lee, Woojin & Roemer, John E., 2006. "Racism and redistribution in the United States: A solution to the problem of American exceptionalism," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1027-1052, August.
- D3 - Microeconomics - - Distribution
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
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- Woojin Lee & John E. Roemer, 2004. "Racism and Redistribution in the United States: A Solution to the Problem of American Exceptionalism," Cowles Foundation Discussion Papers 1462, Cowles Foundation for Research in Economics, Yale University.
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