Bulletin n. 1/2006 | ||
May 2006 | ||
Bjorvatn Kjetil, Cappelen Alexander W. |
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Redistribution and the Nature of Altruism: Should Welfare Programs be Centralized or Decentralized? | ||
in Economics of Governance , Volume 7, Number 1 , 2006 , 133 - 142 | ||
Decentralization of income redistribution may lead to policy competition between jurisdictions and therefore underprovision of redistribution. The ability to carry out redistribution programs is therefore an argument in favor of allocating this responsibility to some higher level authority. On the other hand, empirical results show that the taste for redistribution is lower in multi-ethnic jurisdictions than in more homogenous ones. Centralized redistribution may encompass a larger number of ethnic minorities, and thereby negatively affect redistribution programs. The present paper models the trade-off between these two forces and argues that this trade-off will depend on the nature of altruistic preferences. | ||