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Ideology, Tactics, and Efficiency in Redistributive Politics

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  • Avinash Dixit
  • John Londregan

Abstract

We model the electoral politics of redistribution. Taxation has efficiency and equity effects. Citizens and parties care about inequality in addition to their private concerns for consumption and votes respectively. In equilibrium, each party's strategy can be implemented by a proportional income tax at a rate common to all groups, and group-specific pork-barrel transfers proportionate to each group's political clout. The proportion coefficients chosen by each party reflect a compromise between its ideology and power hunger. Our results relate to "Director's Law", which says that redistributive politics favors middle classes at the expense of both rich and poor.

Suggested Citation

  • Avinash Dixit & John Londregan, 1997. "Ideology, Tactics, and Efficiency in Redistributive Politics," CESifo Working Paper Series 137, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_137
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