The political economy of growth and distribution: A theoretical critique

Arbeitspapier

This paper reconsiders the political economy approach to growth and distribution according to which (1) rising inequality induces more government redistribution; (2) more government redistribution is financed by higher distortionary taxation; and (3) higher distortionary taxes reduce economic growth. We present a variety of theoretical arguments demonstrating that all three propositions may be overturned by simply changing an assumption in a plausible way or adding a relevant real-world element to the basal models. The political economy models of growth and distribution, as well as the specific inequality-growth transmission channel they propose, must therefore be assessed as overly simplistic and inadequate with respect to the issues studied.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WSI-Diskussionspapier ; No. 111

Classification and Topics

• Classification: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
• Subject: Political Economy ; Redistribution ; Inequality ; Economic growth ; Wirtschaftswachstum ; Einkommensverteilung ; Public Choice ; Einkommensumverteilung ; Kritik ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Josten, Stefan Dietrich ; Truger, Achim
• Event: Veröffentlichung
• (who): Hans-Böckler-Stiftung, Wirtschafts- und Sozialwissenschaftliches Institut (WSI)
• (where): Düsseldorf
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/50470
• Last update: 28.04.2025, 12:42 PM CEST