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Disincentives from Redistribution: Evidence on a Dividend of Democracy

Author

Listed:
  • Rupert Sausgruber

    (Vienna University of Economics and Business)

  • Axel Sonntag

    (University of Vienna and IHS Vienna)

  • Jean-Robert Tyran

    (Department of Economics, University of Copenhagen, Denmark)

Abstract

We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a "dividend of democracy" in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a vote than when it is imposed. Redistribution seems to be more legitimate, and hence less demotivating, when accepted in a vote.

Suggested Citation

  • Rupert Sausgruber & Axel Sonntag & Jean-Robert Tyran, 2019. "Disincentives from Redistribution: Evidence on a Dividend of Democracy," Discussion Papers 19-08, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:1908
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    7. Thomas Markussen & Jean-Robert Tyran, 2023. "Is There a Dividend of Democracy? Experimental Evidence from Cooperation Games," CESifo Working Paper Series 10616, CESifo.
    8. Nickolas Gagnon & Riccardo D. Saulle & Henrik W. Zaunbrecher, 2021. "Decreasing Incomes Increase Selfishness," Papers 2107.02888, arXiv.org.
    9. Dal Bó, Pedro & Foster, Andrew & Kamei, Kenju, 2024. "The democracy effect: A weights-based estimation strategy," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 31-45.
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    More about this item

    Keywords

    Redistribution; disincentive effect; voting; legitimacy; realeffort task; lab experiment;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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