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Inequality and Redistribution: Political Parties May Matter

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  • Woojin Lee

Abstract

Within the framework of the generalized Wittman-Roemer model of political competition, this article provides a canonical example showing that political parties may matter in explaining how redistribution policies change with respect to changes in inequality. Some authors (Lee and Roemer, 2005; Ortuño-Ortín and Roemer, 2000) have noticed that in the Wittman-Roemer model, the left and the right parties may respond differently to changes in inequality, but their observation is based upon numerical calculation. The goal of this paper is to construct an analytically tractable example that helps open the black box with sound intuition.

Suggested Citation

  • Woojin Lee, 2014. "Inequality and Redistribution: Political Parties May Matter," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(3), pages 482-495, September.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201409)170:3_482:iarppm_2.0.tx_2-p
    DOI: 10.1628/093245613X13872688900202
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    References listed on IDEAS

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    1. Woojin Lee & John E. Roemer, 2005. "The Rise and Fall of Unionised Labour Markets: A Political Economy Approach," Economic Journal, Royal Economic Society, vol. 115(500), pages 28-67, January.
    2. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
    3. Lindert, Peter H., 1996. "What Limits Social Spending?," Explorations in Economic History, Elsevier, vol. 33(1), pages 1-34, January.
    4. Moene, Karl Ove & Wallerstein, Michael, 2001. "Inequality, Social Insurance, and Redistribution," American Political Science Review, Cambridge University Press, vol. 95(4), pages 859-874, December.
    5. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    6. Ignacio Ortuño Ortín & John E. Roemer, 2000. "Endogenous Party Formation And The Effect Of Income Distribution On Policy," Working Papers. Serie AD 2000-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    7. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    8. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
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    More about this item

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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