Advanced Search
MyIDEAS: Login to save this paper or follow this series

Wealth Distribution and the Provision of Public Goods: Evidence from the United States

Contents:

Author Info

  • Dietz Vollrath

    ()
    (Department of Economics, University of Houston)

Abstract

This paper examines the role of inequality in the provision of public goods. County level data from the U.S. in 1890 provides comparable units of analysis operating with similar property tax systems, ensuring that we do not empirically confuse differences in tax systems with differences in public goods provision. Climatic data is used as an instrument for land inequality to provide identification of the effect of inequality. The results indicate that land inequality caused significantly lower overall property tax rates. This effect is driven almost exclusively by the effect of land inequality on taxes related directly to schooling. In contrast, non-school funding was not significantly affected by inequality. While informative about the effect of land inequality on public goods provision, an examination of the details of the tax system suggests that these results should not necessarily be taken as a rejection of median voter predictions.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.uh.edu/econpapers/RePEc/hou/wpaper/2008-04.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, University of Houston in its series Working Papers with number 2008-04.

as in new window
Length: 42 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:hou:wpaper:2008-04

Contact details of provider:
Postal: Houston TX 77023
Web page: http://www.uh.edu/class/economics/
More information through EDIRC

Related research

Keywords: Land distribution; Inequality; Public Goods; Property Taxes;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Joana Naritomi & Rodrigo R. Soares & Juliano J. Assunção, 2007. "Rent Seeking and the Unveiling of 'De Facto' Institutions: Development and Colonial Heritage within Brazil," NBER Working Papers 13545, National Bureau of Economic Research, Inc.
  2. Easterly, William, 2007. "Inequality does cause underdevelopment: Insights from a new instrument," Journal of Development Economics, Elsevier, vol. 84(2), pages 755-776, November.
  3. Gouveia, Miguel & Masia, Neal A, 1998. " Does the Median Voter Model Explain the Size of Government?: Evidence from the States," Public Choice, Springer, vol. 97(1-2), pages 159-77, October.
  4. Alberto Alesina & Dani Rodrik, 1991. "Distributive Politics and Economic Growth," NBER Working Papers 3668, National Bureau of Economic Research, Inc.
  5. Stanley L Engerman & Kenneth L. Sokoloff, 2002. "Factor Endowments, Inequality, and Paths of Development Among New World Economics," NBER Working Papers 9259, National Bureau of Economic Research, Inc.
  6. Easterly, William, 2000. "the middle class consensus and economic development," Policy Research Working Paper Series 2346, The World Bank.
  7. Persson, T. & Tabellini, G., 1993. "Is Inequality Harmful for Growth," Papers 537, Stockholm - International Economic Studies.
  8. Chad Turner & Robert Tamura & Sean Mulholland & Scott Baier, 2007. "Education and income of the states of the United States: 1840–2000," Journal of Economic Growth, Springer, vol. 12(2), pages 101-158, June.
  9. Joana Narotomi & Rodrigo Soares & Juliano J. Assunção, 2009. "Institutional Development and Colonial Heritage within Brazil," Textos para discussão 561, Department of Economics PUC-Rio (Brazil).
  10. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
  11. Galor, Oded & Moav, Omer & Vollrath, Dietrich, 2008. "Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions and the Great Divergence," CEPR Discussion Papers 6751, C.E.P.R. Discussion Papers.
  12. Daron Acemoglu & María Angélica Bautista & Pablo Querubín & James A. Robinson, 2007. "Economic and Political Inequality in Development: The Case of Cundinamarca, Colombia," NBER Working Papers 13208, National Bureau of Economic Research, Inc.
  13. Partridge, Mark D, 1997. "Is Inequality Harmful for Growth? Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1019-32, December.
  14. Soltow, Lee, 1971. "Economic Inequality in the United States in the Period from 1790 to 1860," The Journal of Economic History, Cambridge University Press, vol. 31(04), pages 822-839, December.
  15. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-98, April.
  16. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
  17. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
  18. Lindert, Peter H., 1996. "What Limits Social Spending?," Explorations in Economic History, Elsevier, vol. 33(1), pages 1-34, January.
  19. Burgess, Robin & Stern, Nicholas, 1993. "Taxation and Development," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 762-830, June.
  20. Galor, Oded & Moav, Omer, 1999. "From Physical to Human Capital Accumulation: Inequality in the Process of Development," CEPR Discussion Papers 2307, C.E.P.R. Discussion Papers.
  21. Miriam Bruhn & Francisco Gallego, 2008. "Good, Bad, and Ugly Colonial Activities: Studying Development Across the Americas," Documentos de Trabajo 334, Instituto de Economia. Pontificia Universidad Católica de Chile..
  22. Benabou, Roland, 2005. "Inequality, Technology and the Social Contract," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 25, pages 1595-1638 Elsevier.
  23. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995. "Power, distortions, revolt and reform in agricultural land relations," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772 Elsevier.
  24. F. C. Rodrigiuez, 1999. "Does Distributional Skewness Lead to Redistribution? Evidence from the United States," Economics and Politics, Wiley Blackwell, vol. 11(2), pages 171-199, 07.
  25. Acemoglu, Daron & Robinson, James A, 1998. "Why did the West Extend the Franchise? Democracy, Inequality and Growth in Historical Perspective," CEPR Discussion Papers 1797, C.E.P.R. Discussion Papers.
  26. Frankema, Ewout, 2006. "The Colonial Origins of Inequality: Exploring the Causes and Consequences of Land Distribution," GGDC Research Memorandum GD-81, Groningen Growth and Development Centre, University of Groningen.
  27. Wong Wei-Kang, 2007. "Economic Growth: A Channel Decomposition Exercise," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-38, January.
  28. Goodrich, Carter, 1950. "The Revulsion Against Internal Improvements," The Journal of Economic History, Cambridge University Press, vol. 10(02), pages 145-169, November.
  29. Figini, P, 1999. "Inequality and Growth Revisited," Trinity Economics Papers 992, Trinity College Dublin, Department of Economics.
  30. Piketty, Thomas, 1997. "The Dynamics of the Wealth Distribution and the Interest Rate with Credit Rationing," Review of Economic Studies, Wiley Blackwell, vol. 64(2), pages 173-89, April.
  31. Bourguignon, Francois & Verdier, Thierry, 2000. "Oligarchy, democracy, inequality and growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 285-313, August.
  32. John Joseph Wallis, 2000. "American Government Finance in the Long Run: 1790 to 1990," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 61-82, Winter.
  33. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't The US Have a European-Style Welfare State?," Harvard Institute of Economic Research Working Papers 1933, Harvard - Institute of Economic Research.
  34. Perotti, Roberto, 1996. " Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-87, June.
  35. Banerjee, Abhijit V & Newman, Andrew F, 1994. "Poverty, Incentives, and Development," American Economic Review, American Economic Association, vol. 84(2), pages 211-15, May.
  36. Birdsall, Nancy & Londono, Juan Luis, 1997. "Asset Inequality Matters: An Assessment of the World Bank's Approach to Poverty Reduction," American Economic Review, American Economic Association, vol. 87(2), pages 32-37, May.
  37. Dasgupta, Partha & Ray, Debraj, 1986. "Inequality as a Determinant of Malnutrition and Unemployment: Theory," Economic Journal, Royal Economic Society, vol. 96(384), pages 1011-34, December.
  38. José Pineda & Francisco Rodríguez, 2006. "The Political Economy of Investment in Human Capital," Economics of Governance, Springer, vol. 7(2), pages 167-193, May.
  39. Rodney Ramcharan, 2010. "Inequality and Redistribution: Evidence from U.S. Counties and States, 1890-1930," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 729-744, November.
  40. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Vollrath, Dietrich, 2008. "Agrarian Structure and Endogenous Financial System Development," MPRA Paper 12430, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hou:wpaper:2008-04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dietrich Vollrath).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.