Social Norms, the Welfare State, and Voting
AbstractThis paper analyzes the interplay between economic incentives and social norms in a public finance context. We assume that to live off one's own work is a social norm, and that the larger the population fraction adhering to this norm, the more intensely it is felt by the individual. It is shown that this may give rise to multiple equilibria and to non-linearities that do not arise from economic incentives alone. In the model, individuals also vote on taxes and transfers. Hence, the social norm influences both their economic and political behavior. We show that monotone and continuous changes in external factors may result in non-monotone, and even discontinuous, changes in political equilibrium.
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Bibliographic InfoPaper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 608.
Length: 33 pages
Date of creation: 03 Nov 1997
Date of revision:
Publication status: Published in The Quarterly Journal of Economics, 1999, pages 1-35.
Contact details of provider:
Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Web page: http://www.iies.su.se/
More information through EDIRC
economic incentives; social norms; public finance;
Other versions of this item:
- Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen, 1996. "Social Norms, the Welfare State, and Voting," Working Paper Series 453, Research Institute of Industrial Economics.
- Lindbeck, A & Nyberg, S & Weibull, J-W, 1996. "Social Norms, the Welfare State, and Voting," Papers 608, Stockholm - International Economic Studies.
- H00 - Public Economics - - General - - - General
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.:
- Akerlof, George A, 1980.
"A Theory of Social Custom, of Which Unemployment May be One Consequence,"
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- George A. Akerlof, 1978. "A theory of social custom, of which unemployment may be one consequence," Special Studies Papers 118, Board of Governors of the Federal Reserve System (U.S.).
- Lindbeck, Assar, 1995.
" Welfare State Disincentives with Endogenous Habits and Norms,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 97(4), pages 477-94, December.
- Lindbeck, A., 1994. "Welfare State Disincentives with Endogenous Habits and Norms," Papers 589, Stockholm - International Economic Studies.
- Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
- Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October.
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