The Principle of Horizontal Equity: Properties and Implications

Abstract:     
The principle of Horizontal Equity (HE), claiming that the ‘equals in all relevant senses should be treated equally’, is considered as a basic principle to be followed in order to design and evaluate a redistributive policy. However, despite several indices of Horizontal Inequity (HI) having been proposed in the literature, the theoretical debate has not clarified yet ‘what is horizontal equity’. In this paper we aim at making clear what is the meaning of the principle of HE and its normative content. In particular we establish the true statuses of the two fundaments of the principle of HE, defining what is meant by ‘equals’ and then treating these ‘equals’ ‘equally’. The former is known as the identification problem, and the latter has typically been regarded as the normative claim of horizontal equity, but perhaps surprisingly the latter may be all but empty. Our analysis brings forth a new and more appropriate definition of the principle of HE. Some implications concerning the normative meaning of an HI index and the relationship between Horizontal and Vertical Equity are derived.

Number of Pages in PDF File: 14

JEL Classification: D63, H24, K00, K34

working papers series