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The Democratic State and Redistribution: Whose Interests Are Served?

Published online by Cambridge University Press:  06 September 2022

MADS ANDREAS ELKJÆR Open the ORCID record for MADS ANDREAS ELKJÆR [Opens in a new window]  and
TORBEN IVERSEN Open the ORCID record for TORBEN IVERSEN [Opens in a new window]
MADS ANDREAS ELKJÆR*
Affiliation:
University of Copenhagen, Denmark
TORBEN IVERSEN*
Affiliation:
Harvard University, United States
*
Mads Andreas Elkjær, Assistant Professor, Department of Political Science, University of Copenhagen, Denmark, [email protected].
Torben Iversen, Harold Hitchings Burbank Professor of Political Economy, Department of Government, Harvard University, United States, [email protected].
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Abstract

Growing economic inequality has raised concerns that democratic governments are no longer responsive to popular demands for redistribution either because the state capacity is eroded by footloose capital or because the wealthy subvert democracy through the power of money. In this paper we critically assess these conjectures against long-standing arguments about redistribution and insurance under democracy. We test the alternatives on a new comprehensive dataset on income inequality from 17 advanced democracies between 1980 and 2019. We find that before taxes and transfers income inequality has increased markedly everywhere but also that government redistribution has played a critical role in compensating the middle class and to a perhaps surprising degree also the poor. However, the United States is a large outlier.

Type
Research Article
Information
American Political Science Review , Volume 117 , Issue 2 , May 2023 , pp. 391 - 406
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the American Political Science Association

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