Do More Unequal Countries Redistribute More? Does the Median Voter Hypothesis Hold?
Do More Unequal Countries Redistribute More?: Does the Median Voter Hypothesis Hold?

December 1999 - The data strongly support the hypothesis that countries with more unequal distribution of factor income redistribute more in favor of the poor - even when the analysis controls for older people's share in total population (that is, for pension transfers). But the evidence on the...

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Bibliographische Detailangaben
1. Verfasser: Milanovic, Branko (VerfasserIn)
Format: Elektronisch E-Book
Sprache:English
Veröffentlicht: Washington, D.C The World Bank 1999
Schlagworte:
Consumption
Disposable Income
Economic Mechanism
Economic Theory and Research
Emerging Markets
Endogenous Growth
Factor Income
Finance and Financial Sector Development
Financial Literacy
Fiscal and Monetary Policy
Growth Rate
Growth Theories
Income
Income Distribution
Income Groups
Income Inequality
Inequality
Investment and Investment Climate
Labor Policies
Macroeconomics and Economic Growth
Mean Income
Median Voter
Median Voter Hypothesis
Personal Income
Personal Income Taxes
Political Mechanism
Poverty Impact Evaluation
Poverty Reduction
Private Sector Development
Public Choice
Public Sector Development
Services and Transfers to Poor
Significant Relationship
Social Protections and Labor
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Zusammenfassung:December 1999 - The data strongly support the hypothesis that countries with more unequal distribution of factor income redistribute more in favor of the poor - even when the analysis controls for older people's share in total population (that is, for pension transfers). But the evidence on the median voter hypothesis is inconclusive even if middle-income groups gain more (or lose less) through redistribution in countries where initial (factor) income distribution is more unequal. The median voter hypothesis is important to endogenous growth theories because it provides the political mechanism through which voters in more unequal countries redistribute a greater proportion of income and thus (it is argued), by blunting incentives, reduce the country's growth rate. But the hypothesis was never properly tested because of lack of data on the distribution of (pre-tax and transfer) factor income across households, and hence on the exact amount of gain by the poorest quintile or poorest half. Milanovic tests the hypothesis using 79 observations drawn from household budget surveys from 24 democracies. The data strongly support the hypothesis that countries with more unequal distribution of factor income redistribute more in favor of the poor - even when the analysis controls for the older people's share in total population (that is, for pension transfers). The evidence on the median voter hypothesis is much weaker. Milanovic does find that middle-income groups gain more (or lose less) through redistribution in countries where initial (factor) income distribution is more unequal. This regularity evaporates, however, when pensions are dropped from social transfers and the focus is strictly on the more redistributive social transfers.
[Fortsetzung 1. Abstract] This paper - a product of Poverty and Human Resources, Development Research Group - is part of a larger effort in the group to study the relationship between democracy and inequality. The study was funded in part by the Bank's Research Support Budget under the research project Democracy, Redistribution, and Inequality (RPO 683-01). Also published as "The median voter hypothesis, income inequality and income redistribution: An empirical test with the required data", European Journal of Political Economy , vol. 16, No. 3, September 2000, pp. 367-410. The author may be contacted at bmilanovic@worldbank.org
Beschreibung:Weitere Ausgabe: Milanovic, Branko: Do More Unequal Countries Redistribute More?
Beschreibung:1 Online-Ressource (1 online resource (56 p.))
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