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Democracy, Redistributive Taxation and the Private Provision of Public Goods

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  • Thomas Markussen

    (Department of Economics, University of Copenhagen)

Abstract

The paper studies in a simple, Downsian model of political competition how the private provision of public goods is affected when it is embedded in a system of democracy and redistributive taxation. Results show that the positive effect of inequality on public goods production, which Olson (1965) pointed to, is weakened and might even be reversed in this context. Also, the median voter may choose a negative tax rate, even if he is poorer than the mean, in order to stimulate public goods production. The relevance of the model is illustrated with an application to the finance of higher education.

Suggested Citation

  • Thomas Markussen, 2010. "Democracy, Redistributive Taxation and the Private Provision of Public Goods," Discussion Papers 10-09, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:1009
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    References listed on IDEAS

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    Cited by:

    1. Lidia Ceriani & Simona Scabrosetti & Francesco Scervini, 2022. "Inequality, Privatization and Democratic Institutions in Developing Countries," Hacienda Pública Española / Review of Public Economics, IEF, vol. 240(1), pages 95-124, March.
    2. Bernard, Sophie & Hotte, Louis & Winer, Stanley L., 2014. "Democracy, inequality and the environment when citizens can mitigate health consequences of pollution privately or act collectively," European Journal of Political Economy, Elsevier, vol. 34(C), pages 142-156.
    3. Opoku, Eric Evans Osei & Acheampong, Alex O., 2023. "Energy justice and economic growth: Does democracy matter?," Journal of Policy Modeling, Elsevier, vol. 45(1), pages 160-186.
    4. Bhattacharya, Sukanta & Saha, Sarani & Banerjee, Sarmila, 2016. "Income inequality and the quality of public services: A developing country perspective," Journal of Development Economics, Elsevier, vol. 123(C), pages 1-17.
    5. Gangqiang Yang & Yongyu Xue & Yuxi Ma, 2019. "Social Organization Participation, Government Governance and the Equalization of Basic Public Services: Evidence from China," IJERPH, MDPI, vol. 16(16), pages 1-20, August.
    6. Maria Ines Barbosa Camargo, 2015. "Efectos de los mecanismos de financiación en el acceso a la educación superior en Colombia," Investigaciones de Economía de la Educación volume 10, in: Marta Rahona López & Jennifer Graves (ed.), Investigaciones de Economía de la Educación 10, edition 1, volume 10, chapter 5, pages 115-134, Asociación de Economía de la Educación.

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    More about this item

    Keywords

    public goods; political economy; inequality; taxation; higher education;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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