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Who wants to redistribute? Russia's tunnel effect in the 1990's

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  • Ravallion, Martin
  • Lokshin, Michael

Abstract

It seems natural to expect the rich to oppose policies to redistribute income from the rich to the poor, and the poor to favor such policies. But this may be too simple a model, say the Authors. Expectations of future welfare may come into play. Well-off people on a downward trajectory may well favor such policies and poor people on a rising trajectory may not. This resistance of upwardly mobile poor people to lasting redistribution is analogous to Hirshman's"tunnel effect", as applied to traffic stuck on a congested two-lane road in a tunnel: People's spirits lift when traffic starts moving again; but when another lane starts moving and theirs doesn't, they might grow furious andwant to correct things by crossing the double line separating the two lanes. Using Russia in the 1990's as the setting, the authors analyze why some people favor governmental redistribution and others do not and whether there is a"tunnel effect". They find that: 1) Some 72 percent of the 7,000 adults surveyed in October 1996 favor government action to reduce incomes of the rich. But the other 28 percent were not only the currently"rich". 2) About 85 percent of those in the poorest consumption decile favor redistribution. But among those who expect their welfare to decline, support for redistribution is high, even among the currently"rich". There is little support for redistribution among the well-off who expect to become even better off. Resistance is greatest among those on a rising consumption path who expect it to continue. 3) Women tend to favor redistribution more than men. 4) Those who favor redistribution include people who voted communists and people who are vulnerable: the old, women, poorly educated adults, people who live in rural areas, people who expect to lose their jobs, and people who do not think the government cares about them.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2150.

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Date of creation: 31 Jul 1999
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Handle: RePEc:wbk:wbrwps:2150

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Related research

Keywords: Public Health Promotion; Economic Theory&Research; Health Economics&Finance; Environmental Economics&Policies; Labor Policies; Health Economics&Finance; Poverty Diagnostics; Inequality; Environmental Economics&Policies; Economic Theory&Research;

References

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  1. Rose, Richard & McAllister, Ian, 1996. "Is Money the Measure of Welfare in Russia?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(1), pages 75-90, March.
  2. Thomas Piketty, 1994. "Social Mobility and Redistributive Politics," Working papers 94-15, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Ravallion, Martin, 1991. "Reaching the Rural Poor through Public Employment: Arguments, Evidence, and Lessons from South Asia," World Bank Research Observer, World Bank Group, vol. 6(2), pages 153-75, July.
  4. Eckel, Catherine C & Grossman, Philip J, 1998. "Are Women Less Selfish Than Men? Evidence from Dictator Experiments," Economic Journal, Royal Economic Society, vol. 108(448), pages 726-35, May.
  5. Ravallion, Martin & Dearden, Lorraine, 1988. "Social Security in a "Moral Economy": An Empirical Analysis for Java," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 36-44, February.
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Cited by:
  1. Vodopivec, Milan & Raju, Dhushyanth, 2002. "Income support systems for the unemployed : issues and options," Social Protection Discussion Papers 25529, The World Bank.

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