Leaky Bucket in the Lab. The Effect of System Inefficiency on Voting on Redistribution
26 Pages Posted: 30 Aug 2017
Date Written: August 28, 2017
Introducing system inefficiency into a simplified Meltzer and Richard (1981) model is predicted to have a twofold effect; it alters subjects' rational vote and triggers their efficiency preferences. In a series of laboratory experiments, we find that system inefficiency biases subjects' preferences tax rate downwards by minus 8% in the individual vote and minus 17% in the group decision. Although these effects are in substantive terms not as strong as the rational egoistic prediction, the robustness analysis confirms that system inefficiency exerts a unique negative effect on subjects' vote choice and the final group decision.
Keywords: redistribution, inefficiency, voting, laboratory experiment, leaky bucket, political attitudes, taxation
JEL Classification: C91, C92, D72
Suggested Citation: Suggested Citation