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Inequality and Redistribution via the Public Provision of Private Goods

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  • Margarita Katsimi
  • Thomas Moutos

Abstract

The relationship between inequality and redistribution is usually studied under the assumption that the government collects different amounts of taxes from each citizen (voter) but gives back the same amount (in cash or in kind) to everyone. In this paper we consider what happens if the government can redistribute through both sides of its budget (revenue and expenditure). We show that inequality may have no discernible effect on the size of redistributive programs.

Suggested Citation

  • Margarita Katsimi & Thomas Moutos, 2004. "Inequality and Redistribution via the Public Provision of Private Goods," CESifo Working Paper Series 1121, CESifo.
    • Handle: RePEc:ces:ceswps:_1121
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    References listed on IDEAS

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    4. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March.
    5. 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.
    6. Lee, Woojin & Roemer, John E., 1999. "Inequality and redistribution revisited," Economics Letters, Elsevier, vol. 65(3), pages 339-346, December.
    7. Flam, Harry & Helpman, Elhanan, 1987. "Vertical Product Differentiation and North-South Trade," American Economic Review, American Economic Association, vol. 77(5), pages 810-822, December.
    8. Allan Meltzer & Scott Richard, 1983. "Tests of a rational theory of the size of government," Public Choice, Springer, vol. 41(3), pages 403-418, January.
    9. F. C. Rodrigìuez, 1999. "Does Distributional Skewness Lead to Redistribution? Evidence from the United States," Economics and Politics, Wiley Blackwell, vol. 11(2), pages 171-199, July.
    10. repec:bla:revinw:v:23:y:1977:i:4:p:405-11 is not listed on IDEAS
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    Keywords

    redistribution; inequality; public goods; median voter;
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