Politically Sustainable Probabilistic Minority Targeting

12 Pages Posted: 21 Aug 2014

See all articles by Philippe De Donder

Philippe De Donder

University of Toulouse 1 - Toulouse School of Economics (TSE)

Eugenio Peluso

University of Verona - Department of Economics

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Date Written: July 31, 2014

Abstract

We show that a transfer targeting a minority of the population is sustained by majority voting, however small the minority targeted, when the probability to receive the transfer is decreasing and concave in income. We apply our framework to the French social housing program and obtain that empirically observed departures from these assumptions are small enough that a majority of French voters should support a positive size of this program. We also provide a sufficient condition on this probability function under which more targeting results in a lower equilibrium size of the transfer system.

Keywords: paradox of redistribution, a program for the poor is a poor program, majority voting, social housing in France

JEL Classification: D720, H530, I380

Suggested Citation

De Donder, Philippe and Peluso, Eugenio, Politically Sustainable Probabilistic Minority Targeting (July 31, 2014). CESifo Working Paper Series No. 4915, Available at SSRN: https://ssrn.com/abstract=2483639

Philippe De Donder (Contact Author)

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

Eugenio Peluso

University of Verona - Department of Economics ( email )

Via dell'Artigliere, 8
37129 Verona
Italy

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