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Income Redistribution and Public-Good Provision in a Diverse Society

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  • Selim Jürgen Ergun

Abstract

I analyze the postelectoral coalition formation process in a two-dimensional political environment. The two dimensions are the degree of a proportional tax rate and the degree of a group-specific public good. Parties are office-motivated and care instrumentally about policy. I analyze when stable coalitions exist and obtain that for that to occur office benefits should exceed a certain level. I analyze how this critical level and the set of policies implemented are affected by the income levels and the degree of diversity. For both office- and policy-motivated parties the same result holds, but the critical level might be lower for the latter.

Suggested Citation

  • Selim Jürgen Ergun, 2011. "Income Redistribution and Public-Good Provision in a Diverse Society," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(2), pages 291-313, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201106)167:2_291:irappi_2.0.tx_2-6
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    References listed on IDEAS

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    1. Enriqueta Aragonès, 2007. "The key party in the Catalan government," Spanish Economic Review, Springer;Spanish Economic Association, vol. 9(4), pages 249-271, December.
    2. Selim Ergun, 2010. "From plurality rule to proportional representation," Economics of Governance, Springer, vol. 11(4), pages 373-408, November.
    3. Enriqueta Aragonès, 2007. "Government formation in a two dimensional policy space," International Journal of Game Theory, Springer;Game Theory Society, vol. 35(2), pages 151-184, January.
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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