Redistribution through a "Leaky Bucket". What explains the Leakages?
AbstractThis paper empirically examines to what extent political factors explain different performances in income redistribution in countries that vary in terms of size of the public sector, tax systems, political institutions and governance. In line with the theory, we use the difference in the ex ante and ex post Gini indices of income inequality as the measure of the degree of redistribution achieved. The estimates show that, holding the share of public spending on GDP constant, parliamentary systems and democracies achieve greater redistribution, while electoral district size, government cohesion, union influence and perceived corruption reduce redistribution. The disaggregation of spending items reveals that while transfers and interest payments do not influence redistribution, provision of public services, mainly health and education do, but the number of bureaucrats involved in such provisions has a negative impact. Within revenues, taxes on income redistribute more than other forms of levies.
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Bibliographic InfoPaper provided by Condorcet Center for political Economy in its series Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS with number 2012-03-ccr.
Date of creation: Apr 2012
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Postal: CREM (UMR CNRS 6211) - Faculty of Economics, 7 place Hoche, 35065 Rennes Cedex - France
Find related papers by JEL classification:
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
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