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Redistribution under general decision rules

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  • Giri Parameswaran
  • Hunter Rendleman

Abstract

We study the political economy of redistribution over a broad class of decision rules. We suggest a simple and elegant procedure to select a robust equilibrium from the multiplicity in the core. Equilibrium policy depends on the full income profile, and, importantly, the preferences of two decisive voters. We show that the effect of increasing inequality depends on the decision rule and the shape of the income distribution; redistribution will increase if both decisive voters are “relatively poor,” and decrease if at least one is sufficiently “rich.” Additionally, redistribution decreases as the polity adopts increasingly stringent super‐majority rules.

Suggested Citation

  • Giri Parameswaran & Hunter Rendleman, 2022. "Redistribution under general decision rules," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(1), pages 159-196, February.
  • Handle: RePEc:bla:jpbect:v:24:y:2022:i:1:p:159-196
    DOI: 10.1111/jpet.12529
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