Essays on the political economy of redistribution

Taxation and spending on public goods, services and income transfers are among the most obvious and most frequent interactions that individual citizens have with their governments in advanced industrial countries. The variation across countries in the efforts made by governments to redistribute across different groups in society is one of the most fundamental questions of democratic capitalism. Despite a long-standing research literature, there remain important unresolved questions about how to explain such variation across countries. This dissertation presents three essays that examine possible causes of variation across countries. The first essay examines variation in preferences over government redistribution at the individual level. Using survey data from fourteen countries I show that working time has a systematic effect on preferences over redistribution: those who work longer hours prefer lower levels of government intervention. This result is robust to the inclusion of a number of controls that might undermine claims of a direct effect of hours on preferences, including measures of work ethic and attitudes towards work and rewards. The second essay examines how political participation may structure whose preferences matter in determining government redistributive policies. In a time-series cross-sectional analysis of the American states from 1978 to 2002 I employ direct measures of the income of the median voter to investigate the individual level logic underpinning expectations about the effects of inequality and turnout on spending. I find no support for the contention that turnout affects government spending via increasing the political representation of the poor. Neither is the argument that inequality leads to higher redistribution via its effects on the preferences of the median voter corroborated by the data. The third essay considers the impact of political institutions on redistributive policy outcomes by examining the asymmetric effect that multiparty competition has on the spending and revenue sides of government policy at the outset of the modern tax state. While fragmented party systems may expand spending, they tend to reduce the ability of governments to enact progressive reforms of direct taxation, thus leading to a paradoxical association between generous spending policies and regressive tax systems. Overall, the dissertation highlights how particular economic and political structures impact types and levels of redistribution across political jurisdictions in ways which have not previously been examined.