The Altruistic Rich? Inequality and Other-Regarding Preferences for Redistribution (original) (raw)
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Class Altruism and Redistribution
SSRN Electronic Journal, 2018
Why do tax rates vary so much across countries? We study the role of other-regarding preferences and ethnic fragmentation in redistribution. A government is elected by altruistic voters and chooses a redistributive income tax. Altruism is directed towards social identity groups. Three main factors yield low levels of redistribution: (i) strong in-group altruism among rich voters-referred to as class altruism; (ii) weak universal altruism-in particular among the rich; and (iii) ethnic fragmentation among poor voters. We document survey evidence that the pattern of altruism in the United States and the European Union is consistent with the observed differences in taxes.
Economic Development, Income Inequality, and Preferences for Redistribution1
International Studies Quarterly, 2010
Adopting a cross-regional and global perspective, this article critically evaluates one of the core assertions of political economy approaches to welfare-that support for redistribution is inversely related to income. We hypothesize that economic self-interest gives way to more uniform support for redistribution in the interest of ensuring that basic or relative needs are met in less developed and highly unequal societies. To test this hypothesis, we analyze individuallevel surveys combined with country-level indicators for more than 50 countries between 1984 and 2004. Our analysis shows that individual-level income does not systematically explain support for redistribution in countries with low levels of economic development or high levels of income inequality. These findings challenge the universality of the assumption of economic selfinterest in shaping preferences for redistribution that has been so pervasive in the literature.
On Altruistic and Electoral Income Redistribution: Theory and Data
2017
We analyze a political competition model of redistributive policies. We show that the net transfers to the income groups consist of two parts, called altruistic and electoral redistribution. In accordance with the theory, the empirical evidence from a sample of developed and developing democracies strongly supports a positive and significant association between: (i) the net group transfers and the initial income gaps, and (ii) the net transfers to the non-poor (and respectively, the after-tax Gini coefficient) and power sharing disproportionality. JEL Classification Codes: C72, D72, D78.
Economic development, income inequality and preferences for redistribution
Adopting a cross-regional and global perspective, this article critically evaluates one of the core assertions of political economy approaches to welfare-that support for redistribution is inversely related to income. We hypothesize that economic self-interest gives way to more uniform support for redistribution in the interest of ensuring that basic or relative needs are met in less developed and highly unequal societies. To test this hypothesis, we analyze individuallevel surveys combined with country-level indicators for more than 50 countries between 1984 and 2004. Our analysis shows that individual-level income does not systematically explain support for redistribution in countries with low levels of economic development or high levels of income inequality. These findings challenge the universality of the assumption of economic selfinterest in shaping preferences for redistribution that has been so pervasive in the literature.
More Income Equality or Not? An Empirical Analysis of Individuals' Preferences for Redistribution
2008
Do people prefer a society with an extensive social welfare system with high taxes, or low taxes but lax redistributive policies? Although economists have for a long time investigated the trade-off mechanism between equity and efficiency, surprisingly little information is available about citizens' preferences over the distribution of income in a society. The aim of this paper is reduce this shortcoming, investigating in an empirical study working with World Values Survey, what shapes individuals' preferences for income equality in Spain. We present evidence that not only traditional economic variables are relevant to be considered, but also factors such as ideology, political interest, fairness perception about others or trust in institutions, are key determinants to understand preferences towards redistribution and equality. Furthermore, we also find that regional conditions affect the citizens' preferences for income equality. Higher income inequality leads to stronger preferences for equality. On the other hand, there is the tendency that higher social expenditures reduce the preferences for income equality.
Preferences for Redistribution: the role of Self-Interest, Social Values and Beliefs
We investigate the role of self-interest and of all social motivation systems - helping nonrelatives, redistribution of common resources, navigating hierarchies, being accepted in our groups - in establishing preferences for helping the needy and in supporting a decrease in income inequality. Guided by the “Moral Foundation Theory”, we have assumed that those preferences would be driven by different motivational systems. We have used data from the sixth wave of the Word Value Survey since it is the only wave with information on the Schwartz social values, which we use to discuss altruistic behaviours. We tested the role of a set of individual variables in shaping those preferences by applying Least Squares Dummy Variable approach to estimate country fixed effects models. Nonlinearities were especially sought with the use of categorical variables, fully exploiting the richness of the dataset. According to our results for 57 countries, motivations behind redistribution for the needy d...
Voting on Income Redistribution: How a Little Bit of Altruism Creates Transitivity
SSRN Electronic Journal, 2000
We consider an election that is solely concerned with redistribution of income. It is well known that when voters are selfish, there is no political equilibrium. We consider the case where voters are modestly altruistic. We demonstrate that modest altruism results in a unique political equilibrium. We also provide an explanation for why voters are much more altruistic than individuals acting alone.
International Studies Quarterly, 2010
Adopting a cross-regional and global perspective, this article critically evaluates one of the core assertions of political economy approaches to welfare—that support for redistribution is inversely related to income. We hypothesize that economic self-interest gives way to more uniform support for redistribution in the interest of ensuring that basic or relative needs are met in less developed and highly unequal societies. To test this hypothesis, we analyze individual-level surveys combined with country-level indicators for more than 50 countries between 1984 and 2004. Our analysis shows that individual-level income does not systematically explain support for redistribution in countries with low levels of economic development or high levels of income inequality. These findings challenge the universality of the assumption of economic self-interest in shaping preferences for redistribution that has been so pervasive in the literature.