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Revealed Political Power

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  • JINHUI H. BAI
  • ROGER LAGUNOFF

Abstract

When is a polity biased? Consider an “outsider” who observes policy data but observes neither citizens’ preferences nor the underlying distribution of political power. He views political power as if it were derived from wealth‐weighted voting, where the weights determine the wealth bias. Positive weights favor the rich whereas negative ones favor the poor. We show that any policy data is rationalized by any wealth‐weighted system. However, policy and polling observations together imply explicit bounds on the set of rationalizing biases. Accumulated data narrows this band. The inferential model is consistent with models of political competition for campaign contributions.

Suggested Citation

  • Jinhui H. Bai & Roger Lagunoff, 2013. "Revealed Political Power," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(4), pages 1085-1115, November.
    • Handle: RePEc:wly:iecrev:v:54:y:2013:i:4:p:1085-1115
    DOI: 10.1111/iere.12029
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    2. Daniel Carroll & Jim Dolmas & Eric Young, 2021. "The Politics of Flat Taxes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 39, pages 174-201, January.

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    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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