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Moral sentiments, democracy and redistributive politics: between nature and culture

  • Gilles Le Garrec

    (OFCE)

According to the standard economic approach, the level of redistribution in a democratic society is growing with the inequality of the income distribution. However, data do not support such a finding. In this article, we assert that the canonical model fails first in its basic assumption, the fundamental selfish nature of human beings. Following Adam Smith as well as modern cognitive sciences, we then suppose that a moral instinct coexists with a selfish one. It follows that democracy, based on an unanimous agreement and not on a majority of voters as in the standard approach, can be characterized by two different cultures. In the first one, in the spirit of Locke, individual property comes before the government. In such a culture, we show that a growing difference between median and mean incomes is not necessarely associated with a higher redistribution. In the second culture, in the spirit of Rousseau, the general will comes before particular interests. As a result, we find that in such a culture an increase of the top incomes can reduce the redistribution.

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Paper provided by Society for Economic Dynamics in its series 2007 Meeting Papers with number 702.

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Date of creation: 2007
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Handle: RePEc:red:sed007:702
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  9. Fehr, Ernst & Schmidt, Klaus M., 2005. "The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories," Discussion Papers in Economics 726, University of Munich, Department of Economics.
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