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Disincentives from redistribution: evidence on a dividend of democracy

Rupert Sausgruber, Axel Sonntag and Jean-Robert Tyran ()

European Economic Review, 2021, vol. 136, issue C

Abstract: We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a “dividend of democracy” in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a vote than when it is imposed. Redistribution seems to be more legitimate, and hence less demotivating, when accepted in a vote.

Keywords: Redistribution; Disincentive effect; Voting; Legitimacy; Real-effort task; Lab experiment (search for similar items in EconPapers)
JEL-codes: C92 D31 D72 H23 (search for similar items in EconPapers)
Date: 2021
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Related works:
Working Paper: Disincentives from Redistribution: Evidence on a Dividend of Democracy (2019) Downloads
Working Paper: Disincentives from Redistribution: Evidence on a Dividend of Democracy (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:136:y:2021:i:c:s0014292121001021

DOI: 10.1016/j.euroecorev.2021.103749

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European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

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