Endogenous party formation and the effect of income distribution on policy

• Autores: Ignacio Ortuño Ortín, John E. Roemer
• Localización: Working papers = Documentos de trabajo: Serie AD, Nº. 6, 2000
• Idioma: inglés
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• Resumen

  • We develop a model of spatial political competition with ideological parties and uncertainty. The political issue is the income tax rate and the amount of a public good. The ideology of each party is determine endogenously. We show that the tax rate does not coincide with the ideal policy of the median voter. Moreover, the tax rate is not increasing in the difference between the mean income and the median income.