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Party Age and Party Color: New Results on the Political Economy of Redistribution and Inequality

Author

Listed:
  • Keefer, Philip
  • Milanovic, Branko
Abstract
This working paper advances research on inequality with unique, new data on income distribution in 61 countries, including 20 Latin American countries, to explore the effects of political parties on redistribution. First, consistent with a central, but still contested, assumption of the political economy literature, left-wing governments redistribute more. In addition, consistent with recent research on the importance of party organization and the organizational differences between younger and older parties, older left-wing parties are more likely to internalize the long-run costs of redistribution and to be more credible in their commitment to redistribution, leading them to redistribute less. With entirely different data, the paper also provides evidence on mechanisms: left-wing governments not only redistribute more; they also tax more. Older left-wing parties, though, tax less than younger ones.

Suggested Citation

  • Keefer, Philip & Milanovic, Branko, 2014. "Party Age and Party Color: New Results on the Political Economy of Redistribution and Inequality," IDB Publications (Working Papers) 6745, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:6745
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    File URL: https://publications.iadb.org/publications/english/document/Party-Age-and-Party-Color-New-Results-on-the-Political-Economy-of-Redistribution-and-Inequality.pdf
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    References listed on IDEAS

    as
    1. Philip Keefer, 2011. "Collective Action, Political Parties, and Pro-Development Public Policy," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 28(01), pages 94-118, June.
    2. Iversen, Torben & Soskice, David, 2006. "Electoral Institutions and the Politics of Coalitions: Why Some Democracies Redistribute More Than Others," American Political Science Review, Cambridge University Press, vol. 100(2), pages 165-181, May.
    3. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
    4. Francesco Scervini, 2012. "Empirics of the median voter: democracy, redistribution and the role of the middle class," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(4), pages 529-550, December.
    5. Ernesto Stein & Lorena Caro, 2017. "Ideology and Taxation in Latin America," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 1-27, April.
    6. Milanovic, Branko, 2010. "Four critiques of the redistribution hypothesis: An assessment," European Journal of Political Economy, Elsevier, vol. 26(1), pages 147-154, March.
    7. Georgy Egorov & Konstantin Sonin, 2013. "A Political Theory of Populism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 771-805.
    8. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    9. Milanovic, Branko, 2000. "The median-voter hypothesis, income inequality, and income redistribution: an empirical test with the required data," European Journal of Political Economy, Elsevier, vol. 16(3), pages 367-410, September.
    10. Dani Rodrik, 1998. "Why Do More Open Economies Have Bigger Governments?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 997-1032, October.
    11. Shayo, Moses, 2009. "A Model of Social Identity with an Application to Political Economy: Nation, Class, and Redistribution," American Political Science Review, Cambridge University Press, vol. 103(2), pages 147-174, May.
    12. Pontusson, Jonas & Rueda, David & Way, Christopher R., 2002. "Comparative Political Economy of Wage Distribution: The Role of Partisanship and Labour Market Institutions," British Journal of Political Science, Cambridge University Press, vol. 32(2), pages 281-308, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Oui, la gauche redistribue plus que la droite
      by ? in D'un champ l'autre on 2014-12-11 03:21:00

    Citations

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    Cited by:

    1. Branko MILANOVIC, 2019. "Market income inequality, left-wing political parties, and redistribution in Latin America," Working Paper cd1121c5-2962-4233-85cc-c, Agence française de développement.
    2. Kosta Josifidis & Radmila Dragutinović Mitrović & Novica Supić, 2016. "Redistribution and Transmission Mechanisms of Income Inequality – Panel Analysis of the Affluent OECD Countries," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 63(2), pages 231-258, April.
    3. Rudolph, Alexandra & Priebe, Jan, 2015. "Pension programs around the world: determinants of social pension," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112986, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Democracy; Political parties; Inequality; Redistribution;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H0 - Public Economics - - General

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