Essays on inequality, redistribution and wealth-based politics

This thesis is a contribution to the theory and empirics of inequality, redistribution and growth. It is divided in three chapters. Two of them study theoretical models of inequality, wealth-based politics and redistribution. The third chapter is an empirical contribution to the literature on growth and the income distribution In the first chapter, we explore the theoretical relation between economic and political inequality and redistribution policy. Using a static model of politics in which wealth determines political power, we study the relationship between a society's level of inequality, its political system, and the redistributive policies it will choose. We explore the widely used argument that the wealthier have more political power which they can use to oppose efficient redistributions. We show that the effect of a rise in inequality on the wealth of the decisive voter does not depend on the wealth bias in the political system per se, but on the extent to which political power is unequally distributed relative to the initial level of wealth inequality. Moreover, we find that the curvature of the political function that links wealth to political weight determines how political power is shifted from the poor to the rich following a rise in inequality. We illustrate these results by using three simple political mechanisms, including a widely used model of political exclusion based on wealth. We show that, contrary to the usual argument, societies where political participation is limited to a small wealthy elite are more subject to redistributive pressures when their level of inequality increases, compared to less exclusive societies.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Economics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2001

Author dc:creator

• Benhassine, Najy, 1970-

Advisor dc:contributor.advisor

• Abhijit V. Banerjee and Michael R. Kremer.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/8222

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/8222