Is Predistribution Superior to Redistribution?

Ravi Kanbur

No 19756, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: I examine the roots of a recent move away from the post-war social democratic consensus on a predominant role for post-market tax and transfer redistribution, towards transforming the pre-market distribution of income earning capabilities (predistribution). This shift from redistribution to predistribution is underpinned by arguments highlighting (i) incentive costs of redistribution, (ii) the greater moral legitimacy of predistribution and (iii) political economy preference for predistribution. These arguments need to be examined closely on conceptual, empirical and policy grounds and, when this is done, I believe that the case for robust redistribution remains as strong as ever.

Keywords: Redistribution; Predistribution; Political economy (search for similar items in EconPapers)
JEL-codes: D31 D63 H20 H23 H53 I31 (search for similar items in EconPapers)
Date: 2024-12
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