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Fairness and Redistribution- the Case of Latin American Countries

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  • Erik Alencar de Figueiredo

Abstract

Following the suggestion of modern egalitarians, the model proposed by Alesina & Angeletos (2005) sets up a fairness rule based on composition of equality, designated by the weights of effort and luck. However, empirical evidence for a set of Latin American countries suggests that, unlike developed countries, these societies do not have a well-established view about the role of merit on economic outcome. Therefore, this paper proposes a theoretical framework based on a new fairness rule, namely the perception that the country does not offer everyone with the same opportunities. The new parameterization leads to a unique and stable equilibrium, characterized by an intermediate level of taxation between the equilibria of the "U.S." and of "Europe".

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Paper provided by Programa de Pós-Graduação em Economia - PPGE, Universidade Federal da Paraíba in its series Série Textos para Discussão (Working Papers) with number 3.

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Date of creation: 2012
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Handle: RePEc:ppg:ppgewp:3

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Keywords: Redistribution; Fairness; Fairness;

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  1. Benabou, Roland & Tirole, Jean, 2004. "Belief in a Just World and Redistributive Politics," Papers, Princeton University, Research Program in Political Economy 08-15-2005a, Princeton University, Research Program in Political Economy.
  2. Birchenall, Javier A., 2001. "Income distribution, human capital and economic growth in Colombia," Journal of Development Economics, Elsevier, Elsevier, vol. 66(1), pages 271-287, October.
  3. Joan M. Esteban & Laurence Kranich, 2002. "Redistributive Taxation with Endogenous Sentiments," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 529.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  4. La Ferrara, Eliana & Alesina, Alberto, 2005. "Preferences for Redistribution in the Land of Opportunities," Scholarly Articles 4552533, Harvard University Department of Economics.
  5. Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," Levine's Bibliography 122247000000000283, UCLA Department of Economics.
  6. Joan Esteban & Laurence Kranich, . "Redistributive Taxation With Endogenous Sentiments," Working Papers, Instituto de Estudios Fiscales 33-02 Classification-JEL , Instituto de Estudios Fiscales.
  7. Alberto Alesina & Eliana La Ferrara, . "Preferences for Redistribution in the Land of Opportunities," Working Papers, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University 178, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  8. Matteo Cervellati & Joan Mª Esteban & Laurence Kranich, 2005. "Redistributive Taxation with Endogenous Sentiments," Working Papers, Barcelona Graduate School of Economics 254, Barcelona Graduate School of Economics.
  9. Ricardo Paes de Barros & Francisco H. G. Ferreira & Jose R. Molinas Vega & Jaime Saavedra Chanduvi, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," World Bank Publications, The World Bank, number 2580, August.
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