Ticchi, Davide () (Department of Economics, University of Urbino and University Pompeu Fabra) Vindigni, Andrea (Institute for International Economic Studies, Stockholm University)
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We present a theory of the choice of alternative democratic constitutions, a majoritarian or a consensual one, in a n unequal society. A majoritarian democracy redistributes resources from the collectivity toward relatively few people, and has a relatively small government and low level of taxation. A consensual democracy redistributes resources toward a broader spectrum of social groups but also have a larger government and a higher level of taxation. A consensual system turns out to be preferred by the society when ex ante income inequality is relatively low, while a majoritarian system is chosen when income inequality is relatively high. Moreover, we obtain that consensual democracies should be expected to be ruled more often by center-left coalitions. Finally, our model also provides a new rationale, based on the endogeneity of the political system, of the positive or absent (rather than negative) association between equality and redistribution transpiring from the cross-sectional evidence of developed countries presented in some recent studies. Some historical and empirical evidence supporting our results is provided.
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Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number
726.
Length: 96 pages Date of creation: 01 Nov 2003 Date of revision: Handle: RePEc:hhs:iiessp:0726
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Davide Ticchi & Andrea Vindigni, 2002.
"Endogenous Constitutions,"
Economics Working Papers
896, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2005.
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Find related papers by JEL classification: D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
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