Munich Personal RePEc Archive

One dollar, one vote

Karabarbounis, Loukas (2010): One dollar, one vote. Published in: Economic Journal , Vol. 553, No. 121 (June 2011): pp. 621-651.

This is the latest version of this item.

[img]
Preview
PDF
MPRA_paper_31371.pdf

Download (355Kb) | Preview

Abstract

This paper revisits the relationship between inequality and redistribution in a panel of advanced OECD countries. Using panel data methods that hold constant a variety of determinants of redistributive spending, I find a non-monotonic relationship between pre-tax-and transfer distribution of income and redistribution. Relative to mean income, a more affluent rich and middle class are associated with less redistribution and a richer poor class is associated with more redistribution. These results are consistent with a one dollar, one vote politico-economic equilibrium: When the income of a group of citizens increases, aggregate redistributive policies tilt towards this group’s most preferred policies.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.