Distributive Politics and Economic Growth

Alberto Alesina and Dani Rodrik

No 565, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies the relationship between political conflict and economic growth in a simple model of endogenous growth with distributive conflicts. We study both the case of two `classes' (workers and capitalists) and the case of a continuum distribution of agents, characterized by their relative shares of capital and labour. We establish several results concerning the relationship between the political influence of the two groups and the level of taxation, public investment, redistribution of income and growth. For example, we show that policies which maximize growth are optimal only for a government that cares only about the `capitalist'. Also, we show that in a democracy (where the `median voter theorem' applies) the rate of taxation is higher and the rate of growth lower, the more unequal is the distribution of wealth. We present empirical results consistent with these implications of the model.

Keywords: Endogenous Growth; Income Distribution; Political Conflict (search for similar items in EconPapers)
Date: 1991-06
References: Add references at CitEc
Citations: View citations in EconPapers (63)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=565 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Distributive Politics and Economic Growth (1994)
Working Paper: Distributive Politics and Economic Growth (1994)
Working Paper: Distributive Politics and Economic Growth (1991)
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:cpr:ceprdp:565

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=565

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().