Party Age and Party Color: New Results on the Political Economy of Redistribution and Inequality

29 Pages Posted: 20 Apr 2016

See all articles by Philip Keefer

Philip Keefer

Inter-American Development Bank

Branko Milanovic

World Bank - Development Research Group (DECRG); University of Maryland

Date Written: December 1, 2014

Abstract

This paper advances research on inequality with unique, new data on income distribution in 61 countries, including 20 Latin American countries, to explore the effects of political parties on redistribution. First, consistent with a central -- but still contested -- assumption of the political economy literature, left-wing governments redistribute more. In addition, consistent with recent research on the importance of party organization and the organizational differences between younger and older parties, older left-wing parties are more likely to internalize the long-run costs of redistribution and to be more credible in their commitment to redistribution, leading them to redistribute less. With entirely different data, the paper also provides evidence on mechanisms: left-wing governments not only redistribute more, they tax more; older left-wing parties, though, tax less than younger ones.

Keywords: Achieving Shared Growth, Pro-Poor Growth, Equity and Development, Business, Peace and Democracy, Development Patterns and Poverty

Suggested Citation

Keefer, Philip and Milanovic, Branko, Party Age and Party Color: New Results on the Political Economy of Redistribution and Inequality (December 1, 2014). World Bank Policy Research Working Paper No. 7129, Available at SSRN: https://ssrn.com/abstract=2533737

Philip Keefer (Contact Author)

Inter-American Development Bank ( email )

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Branko Milanovic

World Bank - Development Research Group (DECRG) ( email )

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HOME PAGE: http://econ.worldbank.org/staff/bmilanovic

University of Maryland ( email )

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College Park, MD 20742
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