Democracy, Redistributive Taxation and the Private Provision of Public Goods

Thomas Markussen

No 10-09, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: The paper studies in a simple, Downsian model of political competition how the private provision of public goods is affected when it is embedded in a system of democracy and redistributive taxation. Results show that the positive effect of inequality on public goods production, which Olson (1965) pointed to, is weakened and might even be reversed in this context. Also, the median voter may choose a negative tax rate, even if he is poorer than the mean, in order to stimulate public goods production. The relevance of the model is illustrated with an application to the finance of higher education.

Keywords: public goods; political economy; inequality; taxation; higher education (search for similar items in EconPapers)
JEL-codes: D31 D7 H2 H41 I22 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2010-03
New Economics Papers: this item is included in nep-pbe, nep-pol and nep-pub
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http://www.econ.ku.dk/english/research/publications/wp/dp_2010/1009.pdf/ (application/pdf)

Related works:
Journal Article: Democracy, redistributive taxation and the private provision of public goods (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:1009

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