IDEAS home Printed from https://ideas.repec.org/p/emc/wpaper/dte573.html
   My bibliography  Save this paper

Elite capture of democratic politics: the role of social identity

Author

Listed:
  • David Juárez-Luna

    ()

  • Christian Ghiglino

    (Division of Economics, CIDE)

Abstract

In the present paper we uncover a novel mechanism through which a minority can gain a disproportionate power in a perfectly functioning democracy. In our model, a government elected by majority within a two party democracy, decides on a unique redistributive instrument, the tax rate. We show that a minority characterised by a high degree of social identification may, in the presence of ideological motives, influence the policy outcome. In particular, a rise in social identification among the rich minority may be able to reduce the tax rate. Importantly, this may happen even if the minority is more ideological than the majority. Finally, we attempt an explanation of the divide in the tax rate between the US and Europe.

Suggested Citation

  • David Juárez-Luna & Christian Ghiglino, 2014. "Elite capture of democratic politics: the role of social identity," Working papers DTE 573, CIDE, División de Economía.
  • Handle: RePEc:emc:wpaper:dte573
    as

    Download full text from publisher

    File URL: http://cide.edu/repec/economia/pdf/DTE/DTE573.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Evren, Özgür, 2012. "Altruism and voting: A large-turnout result that does not rely on civic duty or cooperative behavior," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2124-2157.
    2. John E. Roemer, 1999. "The Democratic Political Economy of Progressive Income Taxation," Econometrica, Econometric Society, vol. 67(1), pages 1-20, January.
    3. Daron Acemoglu & James A. Robinson, 2008. "Persistence of Power, Elites, and Institutions," American Economic Review, American Economic Association, vol. 98(1), pages 267-293, March.
    4. Daron Acemoglu, 2010. "Institutions, Factor Prices, and Taxation: Virtues of Strong States?," American Economic Review, American Economic Association, vol. 100(2), pages 115-119, May.
    5. Gebhard Kirchgässner, 2000. "Probabilistic Voting and Equilibrium: An Impossibility Result," Public Choice, Springer, vol. 103(1), pages 35-48, April.
    6. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422, December.
    7. Avinash Dixit & John Londregan, 1998. "Ideology, Tactics, and Efficiency in Redistributive Politics," The Quarterly Journal of Economics, Oxford University Press, vol. 113(2), pages 497-529.
    8. Bourguignon, Francois & Verdier, Thierry, 2010. "The Simple Analytics of Elite Behaviour Under Limited State Capacity," WIDER Working Paper Series 104, World Institute for Development Economic Research (UNU-WIDER).
    9. Peter Coughlin, 1982. "Pareto optimality of policy proposals with probabilistic voting," Public Choice, Springer, vol. 39(3), pages 427-433, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Democracy; Influential elite; Social identity; Tax rate; Redistribution.;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:emc:wpaper:dte573. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alfonso Miranda). General contact details of provider: http://edirc.repec.org/data/cideemx.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.