Ideology, Tactics, and Efficiency in Redistributive Politics

Dixit, Avinash; Londregan, John

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Ideology, Tactics, and Efficiency in Redistributive Politics

Center for Economic Studies Working Paper at University of Munich, Number 137

Posted: 1 May 1998

See all articles by Avinash Dixit

Avinash Dixit

Princeton University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

John Londregan

Princeton University - Princeton School of Public and International Affairs; Princeton University - Department of Political Science

There are 2 versions of this paper

Date Written: June 1997

Abstract

We model the electoral politics of redistribution. Taxation has efficiency and equity effects. Citizens and parties care about inequality in addition to their private concerns for consumption and votes respectively. In equilibrium, each party's strategy can be implemented by a proportional income tax at a rate common to all groups, and group-specific pork-barrel transfers proportionate to each group's political clout. The proportion coefficients chosen by each party reflect a compromise between its ideology and power hunger. Our results relate to "Director's Law", which says that redistributive politics favors middle classes at the expense of both rich and poor.

JEL Classification: D72, H21, H23

Suggested Citation: Suggested Citation

Dixit, Avinash K. and Londregan, John, Ideology, Tactics, and Efficiency in Redistributive Politics (June 1997). Center for Economic Studies Working Paper at University of Munich, Number 137, Available at SSRN: https://ssrn.com/abstract=82052