Democracy, Redistributive Taxation and the Private Provision of Public Goods
AbstractThe paper studies in a simple, Downsian model of political competition how the private provision of public goods is affected when it is embedded in a system of democracy and redistributive taxation. Results show that the positive effect of inequality on public goods production, which Olson (1965) pointed to, is weakened and might even be reversed in this context. Also, the median voter may choose a negative tax rate, even if he is poorer than the mean, in order to stimulate public goods production. The relevance of the model is illustrated with an application to the finance of higher education.
Download InfoIf 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.
Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 10-09.
Length: 17 pages
Date of creation: Mar 2010
Date of revision:
Contact details of provider:
Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark
Phone: (+45) 35 32 30 10
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk
More information through EDIRC
public goods; political economy; inequality; taxation; higher education;
Other versions of this item:
- Markussen, Thomas, 2011. "Democracy, redistributive taxation and the private provision of public goods," European Journal of Political Economy, Elsevier, vol. 27(1), pages 201-213, March.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-28 (All new papers)
- NEP-PBE-2010-03-28 (Public Economics)
- NEP-POL-2010-03-28 (Positive Political Economics)
- NEP-PUB-2010-03-28 (Public Finance)
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.:
- Milanovic, Branko, 2000. "The median-voter hypothesis, income inequality, and income redistribution: an empirical test with the required data," European Journal of Political Economy, Elsevier, vol. 16(3), pages 367-410, September.
- Milanovic, Branko, 2010.
"Four critiques of the redistribution hypothesis: An assessment,"
European Journal of Political Economy,
Elsevier, vol. 26(1), pages 147-154, March.
- Milanovic, Branko, 2009. "Four critiques of the redistribution hypothesis : an assessment," Policy Research Working Paper Series 5145, The World Bank.
- Stigler, George J, 1970. "Director's Law of Public Income Redistribution," Journal of Law and Economics, University of Chicago Press, vol. 13(1), pages 1-10, April.
- Zhang, Lei, 2008. "Political economy of income distribution dynamics," Journal of Development Economics, Elsevier, vol. 87(1), pages 119-139, August.
- Lindert, Peter H., 1996. "What Limits Social Spending?," Explorations in Economic History, Elsevier, vol. 33(1), pages 1-34, January.
- Hillman,Arye L., 2009.
"Public Finance and Public Policy,"
Cambridge University Press, number 9780521738057, April.
- Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
- Pranab Bardhan & Dilip Mookherjee (ed.), 2006. "Decentralization and Local Governance in Developing Countries: A Comparative Perspective," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262524546, December.
- World Bank, 2008. "World Development Indicators 2008," World Bank Publications, The World Bank, number 11855, August.
- Nicholas Barr, 2004. "Higher Education Funding," Oxford Review of Economic Policy, Oxford University Press, vol. 20(2), pages 264-283, Summer.
- repec:cup:cbooks:9780521855266 is not listed on IDEAS
- Romer, Thomas, 1975. "Individual welfare, majority voting, and the properties of a linear income tax," Journal of Public Economics, Elsevier, vol. 4(2), pages 163-185, February.
- Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, April.
- Baland, Jean-Marie & Platteau, Jean-Philippe, 1997. "Wealth Inequality and Efficiency in the Commons: Part I: The Unregulated Case," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 451-82, October.
- Di Gioacchino, Debora & Sabani, Laura, 2009. "Education policy and inequality: A political economy approach," European Journal of Political Economy, Elsevier, vol. 25(4), pages 463-478, December.
- Harms, Philipp & Zink, Stefan, 2003. "Limits to redistribution in a democracy: a survey," European Journal of Political Economy, Elsevier, vol. 19(4), pages 651-668, November.
- Gilat Levy, 2005. "The Politics of Public Provision of Education," The Quarterly Journal of Economics, MIT Press, vol. 120(4), pages 1507-1534, November.
- Glomm, Gerhard & Ravikumar, B., 2003. "Public education and income inequality," European Journal of Political Economy, Elsevier, vol. 19(2), pages 289-300, June.
- Birdsall, Nancy, 1996. "Public spending on higher education in developing countries: Too much or too little?," Economics of Education Review, Elsevier, vol. 15(4), pages 407-419, 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.
- Xiaobing Wang & Jenifer Piesse, 2009. "Welfare Effects of Regressive Taxation and Subsidies in China," Brooks World Poverty Institute Working Paper Series 10809, BWPI, The University of Manchester.
- Baland, Jean-Marie & Platteau, Jean-Philippe, 1998. "Wealth Inequality and Efficiency in the Commons, Part II: The Regulated Case," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 1-22, January.
- Perotti, Roberto, 1996. " Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-87, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann).
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.