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Endogenous Party Formation And The Effect Of Income Distribution On Policy

  • Ignacio Ortuño Ortín

    (Universidad de Alicante)

  • John E. Roemer

    (University of California-Davis)

We develop a model of spatial political competition with ideological parties and uncertainty. The political issue is the income tax rate and the amount of a public good. The ideology of each party is determine endogenously. We show that the tax rate does not coincide with the ideal policy of the median voter. Moreover, the tax rate is not increasing in the difference between the mean income and the median income.

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2000-06.pdf
File Function: Fisrt version / Primera version, 2000
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Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2000-06.

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Length: 23 pages
Date of creation: Mar 2000
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2000-06
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  1. John E. Roemer, 1997. "The Democratic Political Economy of Progressive Income Taxation," Discussion Papers 97-03, University of Copenhagen. Department of Economics.
  2. Nalebuff, B. & Caplin, A., 1992. "Competition Among Institutions," Discussion Papers 1992_36, Columbia University, Department of Economics.
  3. Partridge, Mark D, 1997. "Is Inequality Harmful for Growth? Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1019-32, December.
  4. Lee, Woojin & Roemer, John E, 1998. " Income Distribution, Redistributive Politics, and Economic Growth," Journal of Economic Growth, Springer, vol. 3(3), pages 217-40, September.
  5. 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 914-27, October.
  6. Cronin, D C, 1979. "Function for Size Distribution of Incomes: A Further Comment," Econometrica, Econometric Society, vol. 47(3), pages 773-74, May.
  7. Roemer, J.E., 1995. "Why the Poor Do not Expropriate the Rich in Democracies: A New Argument," Department of Economics 95-04, California Davis - Department of Economics.
  8. Singh, S K & Maddala, G S, 1976. "A Function for Size Distribution of Incomes," Econometrica, Econometric Society, vol. 44(5), pages 963-70, September.
  9. Rodrik, Dani & Alesina, Alberto, 1994. "Distributive Politics and Economic Growth," Scholarly Articles 4551798, Harvard University Department of Economics.
  10. Gene Grossman & Elhanan Helpman, 1994. "Electoral Competition and Special Interest Politics," NBER Working Papers 4877, National Bureau of Economic Research, Inc.
  11. Persson, T. & Tabellini, G., 1993. "Is Inequality Harmful for Growth," Papers 537, Stockholm - International Economic Studies.
  12. Martin J. Osborne, 1995. "Spatial Models of Political Competition under Plurality Rule: A Survey of Some Explanations of the Number of Candidates and the Positions They Take," Canadian Journal of Economics, Canadian Economics Association, vol. 28(2), pages 261-301, May.
  13. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
  14. McDonald, James B & Ransom, Michael R, 1979. "Functional Forms, Estimation Techniques and the Distribution of Income," Econometrica, Econometric Society, vol. 47(6), pages 1513-25, November.
  15. Alesina, Alberto & Rosenthal, Howard, 1996. "A Theory of Divided Government," Econometrica, Econometric Society, vol. 64(6), pages 1311-41, November.
  16. Grossman, Herschel I., 1995. "Insurrections," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 8, pages 191-212 Elsevier.
  17. Allan Meltzer & Scott Richard, 1983. "Tests of a rational theory of the size of government," Public Choice, Springer, vol. 41(3), pages 403-418, January.
  18. John E. Roemer, 1997. "Political-economic equilibrium when parties represent constituents: The unidimensional case," Social Choice and Welfare, Springer, vol. 14(4), pages 479-502.
  19. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-58, August.
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