Racism and Redistribution in the United States: A Solution to the Problem of American Exceptionalism

84 Pages Posted: 11 Jun 2004

See all articles by Woojin Lee

Woojin Lee

affiliation not provided to SSRN

John E. Roemer

Yale University - Department of Political Science; Yale University - Cowles Foundation

Date Written: June 2004

Abstract

The two main political parties in the United States put forth policies on redistribution and on issues pertaining directly to race. We argue that redistributive politics in America can be fully understood only by taking account of the interconnection between these issues, and the effects of political competition upon the multi-dimensional party platforms. We identify two mechanisms through which racism among American voters decreases the degree of redistribution that would otherwise obtain. Many authors have suggested that voter racism decreases the degree of redistribution due to an anti-solidarity effect: that (some) voters oppose government transfer payments to minorities whom they view as undeserving. We point to a second effect as well: that some voters who desire redistribution nevertheless vote for the anti-redistributive party (the Republicans) because that party's position on the race issue is more consonant with their own, and this, too, decreases the degree of redistribution. We call this the policy bundle effect. The effect of voter racism on redistribution is the sum of these two effects. We propose a formal model of multi-dimensional political competition that enables us to estimate the magnitude of these two effects, and estimate the model for the period 1976-1992. We numerically compute that during this period voter racism reduced the income tax rate by 11-18 percentage points; the total effect decomposes about equally into the two sub-effects. We also find that the Democratic vote share is 5-38 percentage points lower than it would have been, absent racism.

Keywords: racism, distribution,endogenous parties, party unanimity Nash equilibrium, anti-solidarity effect

JEL Classification: D3, D7, H2

Suggested Citation

Lee, Woojin and Roemer, John E., Racism and Redistribution in the United States: A Solution to the Problem of American Exceptionalism (June 2004). Cowles Foundation Discussion Paper No. 1462. Available at SSRN: https://ssrn.com/abstract=556146

Woojin Lee

affiliation not provided to SSRN

John E. Roemer (Contact Author)

Yale University - Department of Political Science ( email )

Box 208269
New Haven, DC 06520-8269
United States
203-432-5249 (Phone)
203-432-6196 (Fax)

HOME PAGE: http://pantheon.yale.edu/~jer39/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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