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Left, Right, Left: Income, Learning and Political Dynamics

  • John Morrow
  • Michael Carter

The political left turn in Latin America, which lagged its transition to liberalized market economies by a decade or more, challenges conventional economic explanations of voting behavior. This paper generalizes the forward-looking voter model to a broad range of dynamic, non-concave income processes. The model implies support for redistributive policies materializes rapidly if few prospects of upward mobility are present. In contrast, modeling voters' ideologically charged beliefs about income dynamics shows a slow and polarizing shift toward redistributive preferences occurs. Simulation using fitted income dynamics suggests that imperfect information better accounts for the shift back to the left, and offers additional insights about political dynamics.

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File URL: http://www.nber.org/papers/w19498.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19498.

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Date of creation: Oct 2013
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Handle: RePEc:nbr:nberwo:19498
Note: DEV POL
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  1. Alberto Alesina & Dani Rodrik, 1991. "Distributive Politics and Economic Growth," NBER Working Papers 3668, National Bureau of Economic Research, Inc.
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  15. repec:dgr:uvatin:20120043 is not listed on IDEAS
  16. Michael Carter & Christopher Barrett, 2006. "The economics of poverty traps and persistent poverty: An asset-based approach," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 178-199.
  17. Musgrove, Philip, 1979. "Permanent Household Income and Consumption in Urban South America," American Economic Review, American Economic Association, vol. 69(3), pages 355-68, June.
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