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Endogenous Party Formation And The Effect Of Income Distribution On Policy

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Author Info

  • Ignacio Ortuño Ortín

    (Universidad de Alicante)

  • John E. Roemer

    (University of California-Davis)

Abstract

We develop a model of spatial political competition with ideological parties and uncertainty. The political issue is the income tax rate and the amount of a public good. The ideology of each party is determine endogenously. We show that the tax rate does not coincide with the ideal policy of the median voter. Moreover, the tax rate is not increasing in the difference between the mean income and the median income.

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2000-06.pdf
File Function: Fisrt version / Primera version, 2000
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2000-06.

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Length: 23 pages
Date of creation: Mar 2000
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2000-06

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Related research

Keywords: Party formation; redistribution; growth.;

References

References listed on IDEAS
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  1. John E. Roemer, 1997. "Political-economic equilibrium when parties represent constituents: The unidimensional case," Social Choice and Welfare, Springer, vol. 14(4), pages 479-502.
  2. Nalebuff, B. & Caplin, A., 1992. "Competition Among Institutions," Discussion Papers 1992_36, Columbia University, Department of Economics.
  3. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-58, August.
  4. John E. Roemer, 1997. "The Democratic Political Economy of Progressive Income Taxation," Discussion Papers 97-03, University of Copenhagen. Department of Economics.
  5. Alesina, Alberto & Rosenthal, Howard, 1996. "A Theory of Divided Government," Econometrica, Econometric Society, vol. 64(6), pages 1311-41, November.
  6. Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 465-90, May.
  7. Roemer, J.E., 1995. "Why the Poor Do not Expropriate the Rich in Democracies: A New Argument," Department of Economics 95-04, California Davis - Department of Economics.
  8. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
  9. Cronin, D C, 1979. "Function for Size Distribution of Incomes: A Further Comment," Econometrica, Econometric Society, vol. 47(3), pages 773-74, May.
  10. Martin J. Osborne, 1995. "Spatial Models of Political Competition under Plurality Rule: A Survey of Some Explanations of the Number of Candidates and the Positions They Take," Canadian Journal of Economics, Canadian Economics Association, vol. 28(2), pages 261-301, May.
  11. Grossman, Gene M & Helpman, Elhanan, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 265-86, April.
  12. Grossman, Herschel I., 1995. "Insurrections," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 8, pages 191-212 Elsevier.
  13. McDonald, James B & Ransom, Michael R, 1979. "Functional Forms, Estimation Techniques and the Distribution of Income," Econometrica, Econometric Society, vol. 47(6), pages 1513-25, November.
  14. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
  15. 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.
  16. Partridge, Mark D, 1997. "Is Inequality Harmful for Growth? Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1019-32, December.
  17. Singh, S K & Maddala, G S, 1976. "A Function for Size Distribution of Incomes," Econometrica, Econometric Society, vol. 44(5), pages 963-70, September.
  18. Lee, Woojin & Roemer, John E, 1998. " Income Distribution, Redistributive Politics, and Economic Growth," Journal of Economic Growth, Springer, vol. 3(3), pages 217-40, September.
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Citations

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Cited by:
  1. Woojin Lee, 2008. "Bandwagon, underdog, and political competition: The uni-dimensional case," UMASS Amherst Economics Working Papers 2008-07, University of Massachusetts Amherst, Department of Economics, revised Apr 2008.
  2. Llavador, Humberto & Solano-García, Angel, 2011. "Immigration policy with partisan parties," Journal of Public Economics, Elsevier, vol. 95(1), pages 134-142.
  3. Andrei Gomberg & Francisco Marhuenda & Ignacio Ortuño-Ortín, 2004. "A model of endogenous political party platforms," Economic Theory, Springer, vol. 24(2), pages 373-394, August.
  4. John Roemer, 2005. "Distribution and politics: a brief history and prospect," Social Choice and Welfare, Springer, vol. 25(2), pages 507-525, December.
  5. Philippe, DE DONDER & Jean, HINDRIKS, 2006. "Equilibrium Social Insurance with Policy-Motivated Parties," Discussion Papers (ECON - Département des Sciences Economiques) 2006018, Université catholique de Louvain, Département des Sciences Economiques.

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