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Rational ignorance and the public choice of redistribution

Author

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  • Valentino Larcinese

    (Banca d'Italia)

Abstract

This paper studies the role of citizens� demand for political information in elections and provides a possible explanation for the poor empirical support encountered by political economy models of income redistribution. It shows that incentives to gather political information may derive from its relevance to private choices. Under quite mild assumptions, the demand for political information is increasing in income. Information affects citizens� responsiveness to electoral platforms, and vote-seeking political parties should take this into account: as a consequence, redistribution will generally be less than predicted by the median voter theorem. Moreover, in contrast with what most literature seems to take for granted, an increase in inequality will not unambigously increase redistribution. Finally, introducing endogenous information may lead some policy restrictions to have effects quite different from those intended.

Suggested Citation

  • Valentino Larcinese, 2002. "Rational ignorance and the public choice of redistribution," Temi di discussione (Economic working papers) 443, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_443_02
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    More about this item

    Keywords

    redistribution; median voter; information; inequality;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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