Working Paper

Democratic Redistribution and Rule of the Majority

Giacomo Corneo, Frank Neher
CESifo, Munich, 2014

CESifo Working Paper No. 5112

Does redistribution in democracies cater to the will of the majority? We propose a direct empirical strategy based on survey data that needs not assume that voters are guided by pecuniary motives alone. We find that most democracies implement the median voter’s preferred amount of redistribution and the probability to serve the median voter increases with the quality of democracy. However, there is a non-negligible share of democracies that implement a minority-backed amount of redistribution. Political absenteeism of the poor cannot explain such outcomes. Rather, they can be explained by the electoral bundling of redistribution with values and rights issues.

CESifo Category
Public Finance
Public Choice
Keywords: income redistribution, democracy, median-voter theorem, inequality
JEL Classification: D300, D700, H100, P160