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Political geography and income inequalities

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  • Gregorini, Filippo

Abstract

We analyze political geography and the size of governments in the presence of income inequality. The social planner solution implies that income inequality is neutral on the size of countries but reduces the optimal provision of public goods within each country. Under additional conditions, a politico-economic equilibrium geography is characterized by suboptimal size of nations, but there may not be a stable equilibrium when inequality is high enough. Finally, we introduce globalization showing that inequality can increase the size of countries, reduce public good provision and, at the same time, decrease their degree of openness.

Suggested Citation

  • Gregorini, Filippo, 2015. "Political geography and income inequalities," Research in Economics, Elsevier, vol. 69(3), pages 439-452.
  • Handle: RePEc:eee:reecon:v:69:y:2015:i:3:p:439-452
    DOI: 10.1016/j.rie.2015.06.001
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    References listed on IDEAS

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    Cited by:

    1. Philippe De Donder & Michel Le Breton & Eugenio Peluso, 2012. "Majority Voting in Multidimensional Policy Spaces: Kramer–Shepsle versus Stackelberg," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(6), pages 879-909, December.
    2. Enrico Bellino, 2012. "Pasinetti on Ricardo," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq1258, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    3. Eric Weese & Masayoshi Hayashi & Masashi Nishikawa, 2015. "Inefficiency and Self-Determination: Simulation-based Evidence from Meiji Japan," Discussion Paper Series DP2015-35, Research Institute for Economics & Business Administration, Kobe University.
    4. Enrico Longoni & Filippo Gregorini, 2009. "Inequality, Political Systems and Public Spending," Working Papers 159, University of Milano-Bicocca, Department of Economics, revised Apr 2009.
    5. Bellani, Luna & Scervini, Francesco, 2015. "Heterogeneous preferences and in-kind redistribution: Theory and evidence," European Economic Review, Elsevier, vol. 78(C), pages 196-219.
    6. Philippe De Donder & Michel Le Breton & Eugenio Peluso, 2012. "On the (sequential) majority choice of public good size and location," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 39(2), pages 457-489, July.
    7. Stefano Colombo & Luigi Filippini, 2012. "Product innovation and logistic optimization in a novel urban-type model," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq1259, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    8. Francesco De Sinopoli & Giovanna Iannantuoni, 2009. "On the expect of ideology in proportional representation systems," Working Papers 160, University of Milano-Bicocca, Department of Economics, revised Apr 2009.

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