IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Redistribution in the Open Economy: A Political Economy Approach

Listed author(s):
  • Vincent Anesi
  • Udo Kreickemeier

This paper develops a two-country model of international trade in which citizens who are heterogeneous with respect to their factor endowments vote over tariffs and income tax rates. In the politico-economic equilibrium, each country chooses its national policies by majority voting, taking the policy choice of the other country as given. By incorporating both income and trade taxes in a unified international-trade framework, we uncover the interplay between majority voting over these two instruments at the domestic level and strategic interdependencies between countries’ trade policies. Our main result is that greater inequality can be conducive to more redistribution via income taxation, more protectionist policies in capital-abundant countries, and less protectionist policies in labour-abundant countries. The model can accommodate the predictions of recent empirical studies on the relationship between inequality, protectionism, and redistribution.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by University of Nottingham, GEP in its series Discussion Papers with number 09/25.

in new window

Date of creation:
Handle: RePEc:not:notgep:09/25
Contact details of provider: Postal:
School of Economics University of Nottingham University Park Nottingham NG7 2RD

Phone: (44) 0115 951 5620
Fax: (0115) 951 4159
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:not:notgep:09/25. 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: (Hilary Hughes)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.