Does Finance Change the Taste for Redistribution?

Roman Horvath, Matej Korinek () and Laurent Weill
Additional contact information
Matej Korinek: Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic

No 2026/10, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This paper investigates whether financial development shapes people’s preferences for redistribution. Although a large literature examines the effects of finance on growth and inequality, much less is known about its influence on the political demand for redistribution. Using individual-level data from the World Values Survey and the European Values Study, we estimate the relation between financial development and preferences for income equality. We find no significant average effect of financial development on redistributive demand. However, this aggregate neutrality masks significant individual-level heterogeneity. We find that financial development is associated with lower support for redistribution among men, married individuals, and right-leaning respondents. In contrast, the effect is significantly positive for more educated individuals. These results suggest that financial development reshapes the political landscape not by shifting average preferences, but by altering the composition and polarization of pro-redistribution coalitions.

Keywords: preferences for redistribution; financial development; income inequality (search for similar items in EconPapers)
JEL-codes: D31 D63 O16 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2026-06, Revised 2026-06
New Economics Papers: this item is included in nep-pol
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ies.fsv.cuni.cz/en/does-finance-change-taste-redistribution (application/pdf)

Related works:
Working Paper: Does Finance Change the Taste for Redistribution? (2026)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2026_10

Access Statistics for this paper

More papers in Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().