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Social Norms, the Welfare State, and Voting

Author

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  • Lindbeck, Assar

    () (Research Institute of Industrial Economics (IFN))

  • Nyberg, Sten

    (Research Institute of Industrial Economics (IFN))

  • Weibull, Jörgen

    (Research Institute of Industrial Economics (IFN))

Abstract

This paper analyzes the interplay between economic incentives and social norms in a public finance context. We assume that to live off one's own work is a social norm, and that the larger the population fraction adhering to this norm, the more intensely it is felt by the individual. It is shown that this may give rise to multiple equilibria and to non-linearities that do not arise from economic incentives alone. In the model, individuals also vote on taxes and transfers. Hence, the social norm influences both their economic and political behavior. We show that monotone and continuous changes in external factors may result in non-monotone, and even discontinuous, changes in the political equilibrium.

Suggested Citation

  • Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen, 1996. "Social Norms, the Welfare State, and Voting," Working Paper Series 453, Research Institute of Industrial Economics.
  • Handle: RePEc:hhs:iuiwop:0453
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    References listed on IDEAS

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    1. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-877, October.
    2. Lindbeck, Assar, 1995. " Welfare State Disincentives with Endogenous Habits and Norms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 477-494, December.
    3. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 749-775.
    4. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
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    Citations

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    Cited by:

    1. Mishkin, Frederic S., 1998. "International Experiences With Different Monetary Policy Regimes," Seminar Papers 648, Stockholm University, Institute for International Economic Studies.
    2. Adrian Chadi, 2012. "Employed But Still Unhappy? On the Relevance of the Social Work Norm," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(1), pages 1-26.
    3. Lindbeck, A., 1998. "Swedish Lessons for Post-Socialist Countries," Papers 645, Stockholm - International Economic Studies.
    4. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 1998. "Equilibrium unemployment insurance," Economics Working Papers 605, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 1999.
    5. Thomas J. Nechyba, 2001. "Social Approval, Values, and AFDC: A Reexamination of the Illegitimacy Debate," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 637-666, June.
    6. Robert A. Moffitt, 2003. "The Temporary Assistance for Needy Families Program," NBER Chapters,in: Means-Tested Transfer Programs in the United States, pages 291-364 National Bureau of Economic Research, Inc.
    7. Shirit Katav-Herz, 2001. "Social Conformity and Child Labor," Working Papers 2001-14, Bar-Ilan University, Department of Economics.
    8. Lindbeck, Assar, 1997. "Incentives in the Welfare State," Seminar Papers 604, Stockholm University, Institute for International Economic Studies.
    9. Mari Rege & Kjetil Telle, 2006. "Unaffected Strangers Affect Contributions," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 32, pages 93-112.
    10. Taylor, John B., 1999. "The robustness and efficiency of monetary policy rules as guidelines for interest rate setting by the European central bank," Journal of Monetary Economics, Elsevier, vol. 43(3), pages 655-679, June.
    11. Mari Rege & Kjetil Telle, 2003. "Indirect Social Sanctions from Monetarily Unaffected Strangers in a Public Good Game," Discussion Papers 359, Statistics Norway, Research Department.
    12. Mari Rege & Kjetil Telle, 2001. "An Experimental Investigation of Social Norms," Discussion Papers 310, Statistics Norway, Research Department.

    More about this item

    Keywords

    WELFARE STATE; ETHICS;

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D69 - Microeconomics - - Welfare Economics - - - Other

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