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Social Norms, the Welfare State, and Voting

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Author Info
Lindbeck, Assar () (Institute for International Economic Studies, Stockholm University)
Nyberg, Sten () (Stockholm University)
Weibull, Jörgen W. () (Stockholm School of Economics)

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Abstract

This 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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Publisher Info
Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 608.

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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.
Handle: RePEc:hhs:iiessp:0608

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Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Phone: +46-8-162000
Fax: +46-8-161443
Web page: http://www.iies.su.se/
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Related research
Keywords: economic incentives; social norms; public finance;

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Find related papers by JEL classification:
H00 - Public Economics - - General - - - General

Cited by:
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  1. Thomas J. Nechyba, 1999. "Social Approval, Values, and AFDC: A Re-Examination of the Illegitimacy Debate," NBER Working Papers 7240, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Robert Moffitt, 2002. "The Temporary Assistance for Needy Families Program," NBER Working Papers 8749, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Hassler, John & Mora, José & Storesletten, Kjetil & Zilibotti, Fabrizio, 1999. "Equilibrium Unemployment Insurance," Seminar Papers 665, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  4. Mari Rege and Kjetil Telle, 2001. "An Experimental Investigation of Social Norms," Discussion Papers 310, Research Department of Statistics Norway. [Downloadable!]
  5. Lindbeck, Assar, 1998. "Swedish Lessons for Post-Socialist Countries," Seminar Papers 645, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  6. Lindbeck, Assar, 1997. "Incentives in the Welfare State," Seminar Papers 604, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  7. Mari Rege & Kjetil Telle, 2006. "Unaffected Strangers Affect Contributions," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 32, pages 93-112. [Downloadable!]
  8. Mishkin, Frederic S., 1998. "International Experiences With Different Monetary Policy Regimes," Seminar Papers 648, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  9. Taylor, John B., 1998. "The Robustness and Efficiency of Monetary Policy Rules as Guidelines for Interest Rate Setting by the European Central Bank," Seminar Papers 649, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  10. Mari Rege and Kjetil Telle, 2003. "Indirect Social Sanctions from Monetarily Unaffected Strangers in a Public Good Game," Discussion Papers 359, Research Department of Statistics Norway. [Downloadable!]
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