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The Poverty of Politics: How Income Redistribution Hurts the Poor

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  • Jeff Clark
  • Gordon Tullock
  • Leon Levy

Abstract

In spite of the significant research literature identifying a tradeoff between income redistribution and economic growth, massive public programs have been implemented to help the poor by transferring income to them. Since Lyndon Johnson's war on poverty began in 1964, over 3.5 trillion dollars have been transferred. However, the possibility that everyone, including the poor, may in fact be made worse off by the transfer has largely been ignored. With a simple algebraic model, the authors demonstrate that, over time, both high and low-income groups are harmed by redistribution. In addition, social mobility, as well as political concerns with relative poverty and international income redistribution increases the damage to all income groups produced by redistribution. Copyright International Atlantic Economic Society 2006

Suggested Citation

  • Jeff Clark & Gordon Tullock & Leon Levy, 2006. "The Poverty of Politics: How Income Redistribution Hurts the Poor," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 34(1), pages 47-62, March.
    • Handle: RePEc:kap:atlecj:v:34:y:2006:i:1:p:47-62
    DOI: 10.1007/s11293-006-6120-z
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    References listed on IDEAS

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    1. Stephen A. Marglin, 1963. "The Social Rate of Discount and The Optimal Rate of Investment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 77(1), pages 95-111.
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    3. Miller, Merton H. & Upton, Charles W., 1986. "Macroeconomics," University of Chicago Press Economics Books, University of Chicago Press, number 9780226526232, December.
    4. Gordon Tullock, 1964. "The Social Rate of Discount and the Optimal Rate of Investment: Comment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(2), pages 331-336.
    5. Browning, Edgar K & Johnson, William R, 1984. "The Trade-Off between Equality and Efficiency," Journal of Political Economy, University of Chicago Press, vol. 92(2), pages 175-203, April.
    6. Stewart, John R, Jr, 1978. "Potential Effects of Income Redistribution on Economic Growth: An Expanded Estimating Procedure Applied to Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 26(3), pages 467-485, April.
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    Cited by:

    1. Dean Tjosvold & Ann Peng & Yi Chen & Fang Su, 2008. "Business and government interdependence in China: Cooperative goals to develop industries and the marketplace," Asia Pacific Journal of Management, Springer, vol. 25(2), pages 225-249, June.

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    More about this item

    Keywords

    I38;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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