Income Redistribution and Public-Good Provision in a Diverse Society


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Ergun S. J.

JOURNAL OF INSTITUTIONAL AND THEORETICAL ECONOMICS-ZEITSCHRIFT FUR DIE GESAMTE STAATSWISSENSCHAFT, vol.167, no.2, pp.291-313, 2011 (Journal Indexed in SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 167 Issue: 2
  • Publication Date: 2011
  • Doi Number: 10.1628/093245611796589979
  • Title of Journal : JOURNAL OF INSTITUTIONAL AND THEORETICAL ECONOMICS-ZEITSCHRIFT FUR DIE GESAMTE STAATSWISSENSCHAFT
  • Page Numbers: pp.291-313

Abstract

I analyze the postelectoral coalition formation process in a two-dimensional political environment. The two dimensions are the degree of a proportional tax rate and the degree of a group-specific public good. Parties are office-motivated and care instrumentally about policy. I analyze when stable coalitions exist and obtain that for that to occur office benefits should exceed a certain level. I analyze how this critical level and the set of policies implemented are affected by the income levels and the degree of diversity. For both office- and policy-motivated parties the same result holds, but the critical level might be lower for the latter.