The Evolution of Ideology, Fairness and Redistribution
Alberto Alesina, _Harvard University and IGIER Bocconi; Guido Cozziy, and Noemi Mantovanz;
Available online as PDF file [27p.] at: http://www.gla.ac.uk/media/media_126414_en.pdf
“………Ideas about what is "fair" above and beyond the individual’s opposition in the income ladder determine preferences for redistribution. We study the dynamic evolution of different economies in which redistributive policies, perception of fairness, inequality and growth are jointly determined.
We show how including fairness explains various observed relationship between inequality, redistribution and growth. We also show how different beliefs about fairness can keep two otherwise identical countries in different development paths for a very long time.
“….In this paper, we have shown how the evolution of the political ideology regarding the fairness of the constellation of income and wealth in society can generate economic and political persistence in inequality, redistribution, and growth. According to our simple framework, ideology does not entail cognitive distortions of reality15 , but it shapes the moral judgment on what wealth distribution would be fair, as well as it internalizes into people’s preferences how strongly the distance between the current wealth distribution and the fair one makes people unhappy. Our model allows us to make sense formally of a variety of observations about the relationship between inequality, redistribution, and persistence of poverty which would be otherwise inconsistent with more standard models of redistributive policies….”
Cozzi, G. and Privileggi, F. (2009). '
The fractal nature of inequality in a fast growing world: new revision'
Discussion Paper 2009-30, Department of Economics,
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