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Why is there so little redistribution?

  • Jo Thori Lind

In democratic societies with skewed income distributions, simple political economy models predict that the poor will form a coalition to implement high taxes. I review this basic theory and some of its extensions. Then I discuss how we can test the model, and some common pitfalls, before I review the empirical findings. Generally, the empirical support for the theory is weak. I end with a review of selected parts of the literature that tries to explain this lack of empirical support.

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File URL: http://www.nopecjournal.org/NOPEC_2005_a06.pdf
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Article provided by Nordic Journal of Political Economy in its journal Nordic Journal of Political Economy.

Volume (Year): 31 (2005)
Issue (Month): ()
Pages: 111-125

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Handle: RePEc:noj:journl:v:31:y:2005:p:111-125
Contact details of provider: Web page: http://www.nopecjournal.org

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  1. Lindert, Peter H., 1996. "What Limits Social Spending?," Explorations in Economic History, Elsevier, vol. 33(1), pages 1-34, January.
  2. Lind, Jo Thori, 2006. "Do the rich vote Conservative because they are rich?," Memorandum 02/2006, Oslo University, Department of Economics.
  3. Roemer, John E., 1998. "Why the poor do not expropriate the rich: an old argument in new garb," Journal of Public Economics, Elsevier, vol. 70(3), pages 399-424, December.
  4. Robert Moffitt & David Ribar & Mark Wilhelm, 1996. "The Decline of Welfare Benefits in the U.S.: The Role of Wage Inequality," NBER Working Papers 5774, National Bureau of Economic Research, Inc.
  5. John E. Roemer & Karine Van der Straeten, 2006. "The Political Economy of Xenophobia and Distribution: The Case of Denmark," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(2), pages 251-277, 07.
  6. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
  7. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-91, September.
  8. Alesina, Alberto F & Rodrik, Dani, 1991. "Distributive Politics and Economic Growth," CEPR Discussion Papers 565, C.E.P.R. Discussion Papers.
  9. Alesina, Alberto F & La Ferrara, Eliana, 2002. "Preferences for Redistribution in the Land of Opportunities," CEPR Discussion Papers 3155, C.E.P.R. Discussion Papers.
  10. Lindert,Peter H., 2004. "Growing Public," Cambridge Books, Cambridge University Press, number 9780521821759, June.
  11. Persson, T. & Tabellini, G., 1993. "Is Inequality Harmful for Growth," Papers 537, Stockholm - International Economic Studies.
  12. Lind, Jo Thori, 2007. "Fractionalization and the size of government," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 51-76, February.
  13. Roland Benabou & Efe A. Ok, 2001. "Social Mobility and the Demand for Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 447-487.
  14. Jose-Victor Rios-Rull & Per Krusell, 1999. "On the Size of U.S. Government: Political Economy in the Neoclassical Growth Model," American Economic Review, American Economic Association, vol. 89(5), pages 1156-1181, December.
  15. Woojin Lee & John Roemer, 2005. "Values and Politics in the US: An Equilibrium Analysis of the 2004 Election," UMASS Amherst Economics Working Papers 2005-08, University of Massachusetts Amherst, Department of Economics.
  16. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
  17. Ravallion, Martin & Lokshin, Michael, 2000. "Who wants to redistribute?: The tunnel effect in 1990s Russia," Journal of Public Economics, Elsevier, vol. 76(1), pages 87-104, April.
  18. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
  19. John Roemer, 2005. "Will democracy engender equality?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(1), pages 217-234, 01.
  20. La Ferrara, Eliana & Alesina, Alberto, 2005. "Preferences for Redistribution in the Land of Opportunities," Scholarly Articles 4552533, Harvard University Department of Economics.
  21. Woojin Lee & John E. Roemer, 2004. "Racism and Redistribution in the United States: A Solution to the Problem of American Exceptionalism," Cowles Foundation Discussion Papers 1462, Cowles Foundation for Research in Economics, Yale University.
  22. Krusell, Per & Quadrini, Vincenzo & Rios-Rull, Jose-Victor, 1997. "Politico-economic equilibrium and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 243-272, January.
  23. Lind, Jo Thori, 2005. "Does permanent income determine the vote?," Memorandum 23/2004, Oslo University, Department of Economics.
  24. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March.
  25. Borge, Lars-Erik & Rattso, J.Jorn, 2004. "Income distribution and tax structure: Empirical test of the Meltzer-Richard hypothesis," European Economic Review, Elsevier, vol. 48(4), pages 805-826, August.
  26. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
  27. Romer, Thomas, 1975. "Individual welfare, majority voting, and the properties of a linear income tax," Journal of Public Economics, Elsevier, vol. 4(2), pages 163-185, February.
  28. Moene, Karl O. & Wallerstein, Michael, 2003. "Income Inequality and Welfare spending: A disaggregated Analysis," Memorandum 18/2003, Oslo University, Department of Economics.
  29. Milanovic, Branko, 2000. "The median-voter hypothesis, income inequality, and income redistribution: an empirical test with the required data," European Journal of Political Economy, Elsevier, vol. 16(3), pages 367-410, September.
  30. Galasso, Vincenzo, 2003. "Redistribution and fairness: a note," European Journal of Political Economy, Elsevier, vol. 19(4), pages 885-892, November.
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