Income Redistribution and Public-Good Provision in a Diverse Society


Creative Commons License

Ergun S. J.

JOURNAL OF INSTITUTIONAL AND THEORETICAL ECONOMICS-ZEITSCHRIFT FUR DIE GESAMTE STAATSWISSENSCHAFT, cilt.167, sa.2, ss.291-313, 2011 (SSCI) identifier identifier

Özet

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.