Multiple Politico-Economic Regimes, Inequality and Growth

54 Pages Posted: 4 Aug 2001

See all articles by Alain Desdoigts

Alain Desdoigts

CES-EUREQua (University of Paris 1 Pantheon-Sorbonne) and Université de Marne-La-Vallée

Fabien Moizeau

Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA)

Date Written: September 2001

Abstract

In this paper, we abandon the stylized median voter and study (i) how distributional tensions can act in many different ways depending on social affinity and on the prospect of upward or downward mobility of the different income classes, (ii) income distribution dynamics, intergenerational community formation and growth. In a world in which redistributive policies, whether fiscal or educational, affect how the entire economy breaks up into different communities, we find multiple politico-economic regimes that are supported by new international empirical evidence. In particular, we highlight a political economy decision mechanism through which the pressure for redistribution can be highly non linear therefore providing an explanation as to why more inequality can be associated with less, rather than more, redistributive taxation. Our framework displays multiple steady states which depend on historical economic discrimination. We also provide sufficient conditions on the initial pattern of income distribution and local versus social spillovers ratio under which inequality and segregation persist in the long run.

Keywords: Community formation, growth, human capital, redistribution, and social mobility

JEL Classification: D31, H2, I22, J62, P16

Suggested Citation

Desdoigts, Alain and Moizeau, Fabien, Multiple Politico-Economic Regimes, Inequality and Growth (September 2001). Available at SSRN: https://ssrn.com/abstract=278509 or http://dx.doi.org/10.2139/ssrn.278509

Alain Desdoigts (Contact Author)

CES-EUREQua (University of Paris 1 Pantheon-Sorbonne) and Université de Marne-La-Vallée ( email )

106-112, bd de L'Hopital
Paris 13 Cedex, 75647
France

Fabien Moizeau

Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA) ( email )

106-112 Boulevard de l'Hopital
Paris Cedex 13, 75647
France

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