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Redistributive Taxation, Democracy and Growth

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  • Dessy, S.

Abstract

The recent theorical literature on the political economy of growth displays contrasting findings on the nature of the political link between income inequality and growth. In this paper, we explain this contrast and argue that in a democracy, when redistribution is in the form of government expenditure on education, and government expenditure does not crowd out private expenditures by altruistic agents, a negative relation between inequality and growth emerges in equilibrium.

Suggested Citation

  • Dessy, S., 1998. "Redistributive Taxation, Democracy and Growth," Papers 9820, Laval - Recherche en Politique Economique.
    • Handle: RePEc:fth:lavape:9820
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    Keywords

    DEMOCRACY ; EDUCATION ; ECONOMIC GROWTH ; HUMAN RESOURCES ; INCOME DISTRIBUTION;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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