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NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Gilat Levy

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August 2005Diversity and Redistribution
with Raquel Fernández: w11570
This paper examines how preference heterogeneity affects the ability of the poor to extract resources from the rich. We study the equilibrium of a game in which coalitions of individuals form parties, parties propose platforms, and all individuals vote, with the winning policy chosen by plurality. Political parties are restricted to offering platforms that are credible (in that they belong to the Pareto set of their members). The platforms specify the values of two policy tools: a general redistributive tax which is lumpsum rebated and a series of taxes whose revenue is used to fund specific (targeted) goods. We show that taste conflict first dilutes but later reinforces class interests. When the degree of taste diversity is low, the equilibrium policy is characterized by some amount of ge...

Published: Fernandez, Raquel and Gilat Levy. "Diversity and Redistribution." Journal of Public Economics 92, 5-6 (June 2008): 925-43. citation courtesy of

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers onlyInformation about this author at RePEc

 
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