Forskning ved Københavns Universitet - Københavns Universitet

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Democracy, Redistributive Taxation and the Private Provision of Public Goods

Publikation: Working paperForskning

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The paper studies in a simple, Downsian model of political competition how the private provision of public goods is affected when it is embedded in a system of democracy and redistributive taxation. Results show that the positive effect of inequality on public goods production, which Olson (1965) pointed to, is weakened and might even be reversed in this context. Also, the median voter may choose a negative tax rate, even if he is poorer than the mean, in order to stimulate public goods production. The relevance of the model is illustrated with an application to the finance of higher education.
OriginalsprogEngelsk
UdgiverDepartment of Economics, University of Copenhagen
Antal sider17
StatusUdgivet - 2010

Bibliografisk note

JEL Classification: D31, D7, H2, H41, I22

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