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The tradeoff between equality and efficiency: Short-run politics and long-run realities

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  • Dwight Lee

Abstract

In concluding this paper the best way to emphasize what has been argued is to make as clear as possible what has not been argued. Nothing in the above argumentation or evidence can, or is intended to, deny that some social welfare programs genuinely serve the long-run interests of the poor. Undoubtedly such programs exist and can be identified as successful. Other programs exist, however, that are undeniably making the poor worse off. From the perspective of reducing income inequality it is obvious that the successful programs should be maintained, and even expanded in ways that further assist the poor, while the harmful programs should be terminated. Unfortunately it is simply not possible politically to select out those programs that do promote broad social goals, such as reducing poverty, while eliminating those programs that do not. This is a point that the present paper is intended to emphasize. Once you open up the political transfer process to one group, no matter how deserving that group may be, economic rents are generated that will motivate competition among politically organized interest groups. The inevitable result of this competition is a package of programs that serve a variety of interests, but which on balance do little, if anything to benefit those groups which it was our intention to assist. But even if it were widely known and accepted that the long-run distributional effects of public assistance were neutral, it would still be difficult politically to do nothing to ‘help’ the poor. Here we are faced with a particular case of what Buchanan (1977) has referred to as the Samaritan's dilemma. Actions that are motivated by feelings of compassion are difficult to resist even if the long-run effects are known to be detrimental to those who are the object of our compassion. There is no obvious escape from this dilemma, and this paper offers none. The purpose has been instead to provide an explanation of why these programs will become more politically entrenched as they become less effective at helping the poor. Copyright Martinus Nijhoff Publishers 1987

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  • Dwight Lee, 1987. "The tradeoff between equality and efficiency: Short-run politics and long-run realities," Public Choice, Springer, vol. 53(2), pages 149-165, January.
    • Handle: RePEc:kap:pubcho:v:53:y:1987:i:2:p:149-165
    DOI: 10.1007/BF00125846
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    References listed on IDEAS

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    1. Morgan Reynolds & Eugene Smolensky, 1978. "The Fading Effect of Government on Inequality," Challenge, Taylor & Francis Journals, vol. 21(3), pages 32-37, July.
    2. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September.
    3. Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-148, February.
    4. Lindsay, Cotton M & Zycher, Benjamin, 1984. "Substitution in Public Spending: Who Pays for Canadian National Health Insurance?," Economic Inquiry, Western Economic Association International, vol. 22(3), pages 337-359, July.
    5. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
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    Cited by:

    1. Livani, Talajeh & Graham, Carol, 2019. "Do social protection programs improve life satisfaction? Evidence from Iraq," World Development Perspectives, Elsevier, vol. 16(C).
    2. Dughera, Stefano & Marciano, Alain, 2022. "Altruism and Strategic Courage. Inside Buchanan's Samaritan's Dilemma," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202201, University of Turin.
    3. Suhyun Jung & Seong-Hoon Cho & Roland K. Roberts, 2015. "The impact of government funding of poverty reduction programmes," Papers in Regional Science, Wiley Blackwell, vol. 94(3), pages 653-675, August.
    4. Alain Marciano, 2022. "Sado-Masochism in Buchanan's Samaritan's Dilemma. A Constitutional Perspective," Post-Print hal-03683854, HAL.
    5. Buchanan, Joy A. & Roberts, Gavin, 2022. "Other people’s money: Preferences for equality in groups," European Journal of Political Economy, Elsevier, vol. 73(C).
    6. Alain Marciano, 2014. "Exploitation, Mutual Advantage and The Myth of the Samaritan's Dilemma," ICER Working Papers 10-2014, ICER - International Centre for Economic Research.
    7. Stefano Dughera & Alain Marciano, 2023. "Inside Buchanan's Samaritan's Dilemma: altruism, strategic courage and ethics of responsibility," Economics of Governance, Springer, vol. 24(2), pages 207-233, June.
    8. Merle Zwiers & Ferry Koster, 2015. "The local structure of the welfare state: Uneven effects of social spending on poverty within countries," Urban Studies, Urban Studies Journal Limited, vol. 52(1), pages 87-102, January.
    9. Hiermeyer, Martin, 2008. "The trade-off between a high and an equal biological standard of living--Evidence from Germany," Economics & Human Biology, Elsevier, vol. 6(3), pages 431-445, December.
    10. Stefano Dughera & Alain Marciano, 2020. "Altruism, predation and the Samaritan's dilemma," Working Papers hal-02550432, HAL.
    11. Dwight Lee, 1989. "The impossibility of a desirable minimal state," Public Choice, Springer, vol. 61(3), pages 277-284, June.

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