Taxation and Redistribution against Inequality: A Mathematical Model

Reducing inequality is a tremendously important sustainable development goal. Albeit providing stylised frames for modelling, also mathematics can contribute to understanding and explaining the emergence of collective patterns in complex socio-economic systems. It can then effectively help to identify actions and measures to be taken and support policy-makers towards adoption of conceivable welfare measures aimed at halting the growth of inequality. Based on these assumptions, we here discuss some variants of a mathematical “micro-to-macro” model for the dynamics of taxation and redistribution processes in a closed trading market society. The model has an exploratory character resulting from possible tuning of various parameters involved: through its analysis, one can foresee the consequences on the long-run income distributions of different fiscal policies and differently weighted welfare policies, interventions, and subsidy provision, as well as the impact of the extent of tax evasion. In short, the model shows that in the long term redistributive policy results in a lower level of economic inequality in society.

Political Budgetary Cycles in Autocratic Redistribution

While political budgetary cycles in democracies have been rigorously studied for the past several decades, surprisingly little is known about electorally motivated policy manipulation in authoritarian regimes. This study analyzes how dictators strategically change the priorities of autocratic policies to cultivate electoral dominance even when election results are predetermined. I argue that dictators spend more money on redistributive policies in election periods. Using budgetary spending data from 63 autocratic countries between 1972 and 2015, this paper presents cross-national evidence of the existence of an electoral cycle in autocratic redistribution. Analyzing Afrobarometer survey data from 18 African autocracies between 2008 and 2015, this study also finds that citizens’ evaluations of redistributive policy fluctuate according to the electoral calendar. These findings contribute to the literature on authoritarian politics by exploring macro- and micro-level mechanisms through which authoritarian rulers improvise policy manipulation to cultivate electoral dominance.

Under- and over-investment in education: the role of locked-in fertility

This research argues that, in the presence of idiosyncratic ability shocks after childbirth, irreversible fertility decisions distort the resource allocation between the quantity and quality of children. In underdeveloped environments, where family size is locked into large levels, education investment places a heavy financial burden on households, which deprives some competent children of learning opportunities. In contrast, in more developed environments, family size is locked into smaller levels, which facilitates education investment even for some children with low aptitude. A redistributive policy to mitigate the distortion is proposed for each stage.

Left Behind: Labor Unions and Redistributive Policy under the Brazilian Workers’ Party

How do leftist governments negotiate the trade-off between courting union support and maintaining the business sector’s trust? Scholars have argued that leftist parties will remain accountable to their labor base when powerful unions have strong ties to centralized leftist parties. However, I argue that strong party-union ties and party leadership centralization may, in fact, insulate leftist presidents against redistributive pressures from below. When party-union ties allow labor leaders to develop careers as professional politicians, these leaders become more responsive to the party’s goals than to their union base. Further, a centralized party organization can exclude unions and leftist factions from the design of redistributive policies. To test my argument, I use a case study of Brazil under the administration of the Worker’s Party (PT).

Institutional Factors Influencing Political Trust in Modern Russia

The aim of this study is to analyze and assess the impact of institutional factors on political trust in various levels of government (federal, regional and local) in modern Russia. Data and methods. The study is based on microdata from the European Bank for Reconstruction and Development (EBRD) “Life in Transition Survey” (LiTS). We examined such institutional factors of political trust as perceived government performance and level of corruption, as well as the level of interpersonal trust. The subjective decile of household wealth was an additional explanatory variable in our analysis. We estimated the model parameters using linear regressions with instrumental variables. Results and their application. First, we found that in 2016 the perceived effectiveness of the federal government was the main determinant of Russian trust in the president. At the same time, the perceived level of local corruption was a major factor of Russian citizens’ (mis)trust in local authorities. Second, we found that poor households turned out to be the most loyal groups of the population towards the Russian president, and we explained this phenomenon by the active redistributive policy of the federal authorities. Third, we revealed a significant positive relationship between political and interpersonal trust at the micro level. In conclusion, we made recommendations on the effective management of political trust in modern Russia.

East Asian Strategies for Combating Income Inequality: A Comparative Analysis of Redistributive Fiscal Policy Efforts in China and Korea

Both China and Korea face different stages of national income inequality as well as distinctive structures in their income distribution. However, not only do levels and structures of income inequality differ in China and Korea, but their measures to tackle income inequality inherently differ. This article investigates how the Chinese and Korean governments respond to income inequality in their countries by analysing fiscal policy on both the expenditure and taxation fronts. The findings show that both China and Korea have increased their redistributive efforts in the recent past; however, Korea’s commitment to tackling income inequality is stronger than that of China. Moreover, this article finds evidence for distinctive strategies for reducing income inequality in China and Korea. Responding to large income disparities at the bottom of the income distribution spectrum, the Chinese government tackles income inequality by supporting low income earners and reducing the tax burden for low income brackets. In contrast, given Korean income inequality can be largely explained by relatively large top income shares, the redistributive policy incorporates newly introduced social benefits excluding top income earners as well as income taxes aimed at the top of the income spectrum.

Domestic Explanations: Inequalities

The most salient empirical results can be summed up in a few points. First, despite the complexities and necessary distinctions, the consensual democracies with coordinated economies tend to have redistributive policy solutions and to correct inequalities. Second, the salience of the migration issue derives either from the consequences of the economic crisis (Italy, Spain, and France) or from basic ideological orientations (Poland). Third, with the Great Recession, the presence of new parties and populist parties became a distinguishing aspect of our six countries. Greater dissatisfaction and the growth of the new protest parties pushed the incumbent leaders to be more responsive. Fourth, we distinguish between a revendicative populism (leftist or inclusionary) and an identitarian populism (rightist or exclusionary). Identitarian populism mainly prevailed in Poland—but has a specific salience also in other countries: from France, with the Front National, to Italy with the League of Salvini, the United Kingdom with UKIP and also with Boris Johnson, and, to a more limited extent, Germany with AfD, and lastly Spain with Vox. Revendicative populism became politically and electorally relevant where the economic crisis was felt most, as Southern European democracies. Fifth, the relationship between the vote of the left parties (moderate and radical) and the trend of inequality shows a rather random connection. It is possible to identify a few patterns in the six countries. Finally, the connection between protest movements and the related institutionalization is different from case to case, with Germany, the United Kingdom, and Poland, where there are no relevant social movements.