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Democracy, redistributive taxation and the private provision of public goods

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  • Markussen, Thomas

Abstract

The paper studies in a simple, Downsian model of political competition the private provision of public goods embedded in a system of democracy and redistributive taxation. Results show that the positive effect of inequality on production of public goods, to which Olson (1965) pointed, is weakened and might even be reversed in this context. Also, the median voter may choose a negative tax rate, even if he or she is poorer than the mean, in order to stimulate production of public goods. The relevance of the model is illustrated with an application to the financing of higher education.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:poleco:v:27:y:2011:i:1:p:201-213
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    Cited by:

    1. Bernard, Sophie & Hotte, Louis & Winer, Stanley L., 2014. "Democracy, inequality and the environment when citizens can mitigate health consequences of pollution privately or act collectively," European Journal of Political Economy, Elsevier, vol. 34(C), pages 142-156.
    2. Bhattacharya, Sukanta & Saha, Sarani & Banerjee, Sarmila, 2016. "Income inequality and the quality of public services: A developing country perspective," Journal of Development Economics, Elsevier, vol. 123(C), pages 1-17.
    3. Maria Ines Barbosa Camargo, 2015. "Efectos de los mecanismos de financiación en el acceso a la educación superior en Colombia," Investigaciones de Economía de la Educación volume 10,in: Marta Rahona López & Jennifer Graves (ed.), Investigaciones de Economía de la Educación 10, edition 1, volume 10, chapter 5, pages 115-134 Asociación de Economía de la Educación.

    More about this item

    Keywords

    Public goods Political economy Inequality Taxation Higher education;

    JEL classification:

    • 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

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