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Fairness and Redistribution- the Case of Latin American Countries

  • Erik Alencar de Figueiredo

Following the suggestion of modern egalitarians, the model proposed by Alesina & Angeletos (2005) sets up a fairness rule based on composition of equality, designated by the weights of effort and luck. However, empirical evidence for a set of Latin American countries suggests that, unlike developed countries, these societies do not have a well-established view about the role of merit on economic outcome. Therefore, this paper proposes a theoretical framework based on a new fairness rule, namely the perception that the country does not offer everyone with the same opportunities. The new parameterization leads to a unique and stable equilibrium, characterized by an intermediate level of taxation between the equilibria of the "U.S." and of "Europe".

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Paper provided by Programa de Pós-Graduação em Economia - PPGE, Universidade Federal da Paraíba in its series Série Textos para Discussão (Working Papers) with number 3.

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Date of creation: 2012
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Handle: RePEc:ppg:ppgewp:3
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  1. Birchenall, Javier A., 2001. "Income distribution, human capital and economic growth in Colombia," Journal of Development Economics, Elsevier, vol. 66(1), pages 271-287, October.
  2. Joan Esteban & Laurence Kranich, . "Redistributive Taxation With Endogenous Sentiments," Working Papers 33-02 Classification-JEL , Instituto de Estudios Fiscales.
  3. Jaime Saavedra-Chanduví & José R. Molinas & Ricardo Paes de Barros & Francisco H. G. Ferreira, 2009. "Measuring Inequality of Opportunities in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 60098.
  4. Benabou, Roland & Tirole, Jean, 2004. "Belief in a Just World and Redistributive Politics," Papers 08-15-2005a, Princeton University, Research Program in Political Economy.
  5. Joan M. Esteban & Laurence Kranich, 2002. "Redistributive Taxation with Endogenous Sentiments," UFAE and IAE Working Papers 529.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  6. Alberto Alesina & Eliana La Ferrara, 2001. "Preferences for Redistribution in the Land of Opportunities," Harvard Institute of Economic Research Working Papers 1936, Harvard - Institute of Economic Research.
  7. Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," NajEcon Working Paper Reviews 122247000000000306, www.najecon.org.
  8. Matteo Cervellati & Joan Mª Esteban & Laurence Kranich, 2005. "Redistributive Taxation with Endogenous Sentiments," Working Papers 254, Barcelona Graduate School of Economics.
  9. La Ferrara, Eliana & Alesina, Alberto, 2005. "Preferences for Redistribution in the Land of Opportunities," Scholarly Articles 4552533, Harvard University Department of Economics.
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