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An Interest Group Model of Direct Income Redistribution

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  • Plotnick, Robert D

Abstract

An interest group model of the determinants of policies which directly re distribute income to low income persons is developed and tested. The model assum es that altruistic taxpayers, nonaltruistic taxpayers, and needy beneficiaries f orm separate interest groups from which politicians seek support. Benefit levels depend on variables such as taxpayer income and the price of benefits but, unlike median voter models, the model also implies a role for interest group strengt h and competition between political parties. The author uses latent variable met hods and data on the Aid to Families with Dependent Children program to demonstr ate empirical support forthe model. Copyright 1986 by MIT Press.

Suggested Citation

  • Plotnick, Robert D, 1986. "An Interest Group Model of Direct Income Redistribution," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 594-602, November.
  • Handle: RePEc:tpr:restat:v:68:y:1986:i:4:p:594-602
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    Cited by:

    1. Howard Chernick, 1998. "Fiscal Effects of Block Grants for the Needy: An Interpretation of the Evidence," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(2), pages 205-233, May.
    2. Potters, Jan & Sloof, Randolph, 1996. "Interest groups: A survey of empirical models that try to assess their influence," European Journal of Political Economy, Elsevier, vol. 12(3), pages 403-442, November.
    3. Janusz Mrozek, 2000. "Changes over time in the decision to adopt curbside recycling," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 28(2), pages 239-253, June.
    4. Christian Pfarr & Andreas Schmid & Morten Raun Mørkbak, 2018. "Modelling Heterogeneous Preferences for Income Redistribution–An Application of Continuous and Discrete Distributions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(2), pages 270-294, June.
    5. Pfarr, Christian & Schmid, Andreas & Mørkbak, Morten Raun, 2015. "Latent characteristics and preferences for income redistribution," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113001, Verein für Socialpolitik / German Economic Association.
    6. Galasso, Emanuela & Ravallion, Martin, 2000. "Distributional outcomes of a decentralized welfare program," Policy Research Working Paper Series 2316, The World Bank.
    7. Fredriksson, Per G. & Gaston, Noel, 1999. "The "greening" of trade unions and the demand for eco-taxes," European Journal of Political Economy, Elsevier, vol. 15(4), pages 663-686, November.
    8. Moffitt, Robert & Ribar, David & Wilhelm, Mark, 1998. "The decline of welfare benefits in the U.S.: the role of wage inequality," Journal of Public Economics, Elsevier, vol. 68(3), pages 421-452, June.
    9. Paul R. Blackley, 2003. "Price versus Income Effects as Sources of Growth in Government's Share of GDP," Public Finance Review, , vol. 31(3), pages 241-262, May.
    10. Craig, Steven G. & Howard, Larry L., 2014. "Is Medicaid crowding out other state government expenditure? Internal financing and cross-program substitution," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 164-178.
    11. James R. Baumgardner, 1993. "Tests of Median Voter and Political Support Maximization Models: the Case of Federal/State Welfare Programs," Public Finance Review, , vol. 21(1), pages 48-83, January.
    12. Smith, Mark W, 1999. "Should we expect a race to the bottom in welfare benefits? Evidence from a multistate panel, 1979-1995," MPRA Paper 10125, University Library of Munich, Germany.
    13. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
    14. Thomas A. Husted, 1990. "Micro-Based Examination of the Demand for Income-Redistribution Benefits," Public Finance Review, , vol. 18(2), pages 157-181, April.
    15. Howard Chernick, 1999. "State Fiscal Substitution Between the Federal Food Stamp Program and AFDC, Medicaid, and SSI," JCPR Working Papers 123, Northwestern University/University of Chicago Joint Center for Poverty Research.

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