Who wants to redistribute? Russia's tunnel effect in the 1990's

Martin Ravallion and Michael Lokshin

No 2150, Policy Research Working Paper Series from The World Bank

Abstract: It seems natural to expect the rich to oppose policies to redistribute income from the rich to the poor, and the poor to favor such policies. But this may be too simple a model, say the Authors. Expectations of future welfare may come into play. Well-off people on a downward trajectory may well favor such policies and poor people on a rising trajectory may not. This resistance of upwardly mobile poor people to lasting redistribution is analogous to Hirshman's"tunnel effect", as applied to traffic stuck on a congested two-lane road in a tunnel: People's spirits lift when traffic starts moving again; but when another lane starts moving and theirs doesn't, they might grow furious andwant to correct things by crossing the double line separating the two lanes. Using Russia in the 1990's as the setting, the authors analyze why some people favor governmental redistribution and others do not and whether there is a"tunnel effect". They find that: 1) Some 72 percent of the 7,000 adults surveyed in October 1996 favor government action to reduce incomes of the rich. But the other 28 percent were not only the currently"rich". 2) About 85 percent of those in the poorest consumption decile favor redistribution. But among those who expect their welfare to decline, support for redistribution is high, even among the currently"rich". There is little support for redistribution among the well-off who expect to become even better off. Resistance is greatest among those on a rising consumption path who expect it to continue. 3) Women tend to favor redistribution more than men. 4) Those who favor redistribution include people who voted communists and people who are vulnerable: the old, women, poorly educated adults, people who live in rural areas, people who expect to lose their jobs, and people who do not think the government cares about them.

Keywords: Public Health Promotion; Economic Theory&Research; Health Economics&Finance; Environmental Economics&Policies; Labor Policies; Health Economics&Finance; Poverty Diagnostics; Inequality; Environmental Economics&Policies; Economic Theory&Research (search for similar items in EconPapers)
Date: 1999-07-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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