Rational ignorance and the public choice of redistribution

Valentino Larcinese

No 443, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper studies the role of citizens� demand for political information in elections and provides a possible explanation for the poor empirical support encountered by political economy models of income redistribution. It shows that incentives to gather political information may derive from its relevance to private choices. Under quite mild assumptions, the demand for political information is increasing in income. Information affects citizens� responsiveness to electoral platforms, and vote-seeking political parties should take this into account: as a consequence, redistribution will generally be less than predicted by the median voter theorem. Moreover, in contrast with what most literature seems to take for granted, an increase in inequality will not unambigously increase redistribution. Finally, introducing endogenous information may lead some policy restrictions to have effects quite different from those intended.

Keywords: redistribution; median voter; information; inequality (search for similar items in EconPapers)
JEL-codes: D31 D72 D83 H50 (search for similar items in EconPapers)
Date: 2002-07
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_443_02

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