The Political Economy of Redistribution
Why do some countries or regions redistribute more income than others? What accounts for changes in patterns of redistribution over time? This interdisciplinary research field seeks to answer these questions empirically by applying a range of approaches drawn from political science, economics, sociology, geography and history. By studying "redistribution," we seek to explain: 1) how individuals cluster in geographic space according to income, class, and political preference; 2) how different political institutions aggregate preferences in different ways; 3) the impact of non-economic issue dimensions on patterns of redistribution; and 4) the role(s) of regime type, factors of production, sectoral politics, exposure to market risks, and asset specificity in patterns of redistribution.
- Jonathan Rodden
- Professor, Stanford University, Political Science [ bio ]
Jonathan Rodden is Ford International Associate Professor in the Department of Political Science at the Michigan Institute of Technology, and currently a Fellow in the Center for Advanced Studies in the Behavioral Sciences at Stanford University. Professor Rodden, who received his Ph.D. from Yale University in 2000, researches and teaches on the political economy of institutions; his interests include federalism, fiscal decentralization, inequality, redistribution, modes of political representation, as well as economic and political geography, emphasizing American and European politics. With Professor Erik Wibbels, he was awarded a grant from the National Science Foundation, “States, Rates, and the Fates of Federations: Regional Politics and Fiscal Policy around the World.” Professor Rodden, the author of numerous articles and chapters, has recently published Hamilton’s Paradox: The Promise and Peril of Fiscal Federalism (Cambridge, 2006).
- Erik Wibbels
- Associate Professor, Duke University, Political Science [ bio ]
Erik Wibbels is Associate Professor of Political Science at the University of Washington and Faculty Associate at the Harry Bridges Center for Labor Studies. Professor Wibbels received his Ph.D. from the University of New Mexico in 2000. He specializes in comparative political economy with an emphasis on the politics of market reform in Latin America. Other areas of interest include political parties, federalism, and statistical methods, and he has conducted field research in Argentina and Mexico. With Professor Jonathan Rodden, he was awarded a grant from the National Science Foundation, “States, Rates, and the Fates of Federations: Regional Politics and Fiscal Policy around the World.” Professor Wibbels is the author of Federalism and the Market: Intergovernmental Conflict and Economic Reform in the Developing World (Cambridge, 2005).
- Heather Bergman
- University of California, Los Angeles, Political Science
Reliance on Volatile Foreign Capital and the Politics of Regional Redistribution in Latin America[ project summary ]This research will seek to address a paradox that has emerged from the literature on regional redistribution of income and its relationship to emerging market countries’ greater integration into global markets. On the one hand, if this integration provides governments with more resources to redistribute to poorer regions (and more incentive to compensate such regions for risks they take on with exposure to the market), we should expect to see more policies aimed at regional redistribution. On the other hand, this market integration and hence greater exposure to the demands of foreign investors increases the pressure on central governments to pass policies that foreign investors demand. If investors, as the literature assumes, prefer less redistribution over more redistribution, then we should expect to see fewer policies aimed at redistributing revenues to poor regions and thus higher regional inequality. In Latin America, at least, we observe both outcomes. I will argue that what determines whether or not governments redistribute will depend at least in part on the credibility and strength of the foreign investors’ demands. I will use a cross-country dataset for Latin American countries as well as other regions to test the degree to which increasing market integration along with other measures of political variables influences the level of regional redistribution.
- Luis Antonio Camacho-Solis
- University of Texas at Austin, Political Science
Statists or Free-Marketers? Preferences for Redistribution in Latin America[ project summary ]Over the past two decades, market reforms and state retrenchment across Latin America have led to varying levels of demands for state-sponsored redistribution across countries and within countries over time. Existing theories about why people endorse public welfare cannot account for this variation; both structural accounts based on class-power and rationalist explanations based on individuals’ skill sets and employment sectors predict stability in demands for redistribution. My theory overcomes this limitation by stressing the interaction of two dynamic factors: individuals’ prospects of social mobility and the broader macroeconomic context. I argue that during periods of stable macroeconomic conditions, individuals’ predictions about future social mobility affect their preferences for redistribution as one would expect: upwardly mobile individuals prefer less redistribution than downwardly mobile ones. However, when the economy is unstable, individuals heavily discount their future mobility and increase their demands for redistribution. Through future dissertation research, I plan to further develop these ideas into a theory of the formation of preferences for redistribution in developing democracies.
- Miguel de Figueiredo
- University of California, Berkeley, Political Science
The Politics of Poverty: Explaining the Origins, Administration, and Outcomes of Social Programs in Latin America[ project summary ]Starting in the 1990s, Brazil and Mexico embarked upon unprecedented strategies for combating poverty. Rather than invest directly in schools or healthcare for the poor, both countries launched programs that gave direct cash transfers to families in exchange for a child’s school attendance or health clinic visits from family members. Mexico’s first anti-poverty program consisted of clientelistic targeting with mediocre social welfare effects, followed by increasingly de-politicized targeting with welfare-improving results. In contrast, Brazil’s poverty alleviation originally involved low politicization with little evidence of electoral targeting, followed by relaxed enforcement of program conditions and high electoral issue salience. These events raise important questions that my pre-dissertation research will explore: (a) When and how do politicians manipulate anti-poverty programs for political gain, and (b) what are the social welfare effects in the presence or absence of different forms of manipulation? Specifically, what are the levers politicians have to use these programs for political gain? Are the programs having an impact on voting by the poor? What are the programs’ effects in eliminating poverty traps? These questions are particularly relevant to Latin America, where income inequality is particularly high, and where the poor are emerging as an important electoral constituency.
- Michael C Ewers
- Ohio State University Main Campus, The, Geography
Migration, Rent Distribution and Development in the New Gulf Development States[ project summary ]This is the pilot project of a dissertation which will examine the relationship between wealth distribution and migration in three Arab Gulf States – Bahrain, Qatar, and the United Arab Emirates –by contrasting current labor migration composition and labor force requirements with those of 25 years ago. Economic development in the Gulf is the result of oil-generated wealth accumulation, which stimulated large flows of skilled migrants from Western multinational corporations (MNCs) and low-skilled migrants from developing countries. Gulf governments created vast bureaucracies to distribute this wealth to a minority citizenry. Recognizing the unsustainability of a mono-resource economy, new development strategies have been instituted, including economic diversification beyond oil and labor indigenization programs to limit foreign labor. Diversification is primarily occurring through urban infrastructural projects to attract non-oil MNC subsidiaries and tourism. During this pilot, key informant interviews will be conducted with MNC and Chamber of Commerce representatives. For subsequent dissertation research, themes from these interviews will be the basis of a large survey of regional MNC subsidiaries. This survey, combined with analysis of labor data, will assess whether, contrary to labor indigenization, current development paradigms are requiring further importation of labor, thus perpetuating the rent-distribution economy in a new guise.
- Guy S Grossman
- Columbia University, Political Science
Three Worlds of Arab Welfare Capitalism - the Middle East in Comparative Perspective[ project summary ]Adopting a broad approach to welfare-states, one that includes social insurance, provision of social services, labor market regulations and overall macroeconomic steering, my dissertation identifies and explains the rise of different models of welfare capitalism in the Middle East in 1950s-1980s, as well as subsequent reform and retrenchment in the last two decades following pressure of capital mobility and oil-price fluctuations. The dissertation, which addresses a disturbing lacuna in the literature, integrates micro-foundational level analysis with structural conditions. It explains origin and change of welfare policies in the MENA – along with their redistributive outcomes – by accounting to differences in the preferences of governments and pivotal societal actors towards welfare policies and to variations in political factors that influence the incorporation of preferences into the policymaking process. Whereas governments’ preferences are derived from economic development strategies, state-revenue structures, and the structure of political competition, non-monolithic business and labor preferences are derived from states’ capacity and from the way welfare policies distribute risks associated with work cycles. Finally, the study also investigates how institutions established in the expansion era shape the responses to the challenges of globalization during the retrenchment period. Importantly, this study integrates the MENA experience to comparative social policy.
- Tai-Wei Derek Liu
- University of California, San Diego, Political Science
The Political Logic of the Financing and Provision of Social Welfare in China[ project summary ]After the early period of economic reform when income distribution usually becomes more unequal, a government, especially a socialist one, would be expected to increase social policy expenditure for redistributive purpose in order to prevent a backlash against the government. Contrary to this expectation, the public financing of social welfare in China has dropped significantly since 1994. Fifteen years after the start of China’s economic reforms, the responsibility for welfare has been shifted away from public provision to individual provision. My research seeks to understand this Chinese trend of shifting welfare burdens from the state to the individual which violates the redistributive goal by comparing it with other transition economies with authoritarian or less institutionalized democratic governments. How much of an anomaly is this Chinese trend? Could it be due to the decentralized nature of Chinese authoritarian institutions? My initial research suggests that local officials are more interested in economic growth than in funding welfare for local citizens, and they may have enough political influence to affect redistributive policies. By comparing China with other transition economies, I hope to shed light on the impact of decentralization on a nation’s redistribution performance.
- Christopher Marcum
- University of California, Irvine, Sociology
Population and Organizational Response to Disasters[ project summary ]In 2005, media coverage of Hurricane Katrina brought issues of age, race, income, class, politics, and geography to the forefront of national politics. Individuals experienced the hurricane and the subsequent response differently, depending on these social and economic characteristics. The question of what to do with the irreparable infrastructure and the displaced population very quickly became a question of redistribution, framed in terms of “aid” and “rebuilding” the Gulf Coast. From a sociological perspective these questions intersect in terms of a broader question of inequality and access to resources. This study evaluates the extent of redistribution inequality during the organizational response to Hurricane Katrina.
- Rachel Meltzer
- New York University, Robert F. Wagner School of Public Service
Business Improvement Districts and Neighborhood Change: A Political and Socioeconomic Analysis[ project summary ]Over the past two decades U.S. cities have increasingly adopted Business Improvement Districts (BIDs) as a way to revitalize their urban centers. As city centers re-populate, the demand for public services diversifies across neighborhoods, and some property owners will view the standard city package of public services as inadequate. Yet due to collective action problems, the property owners in high-demand areas cannot mobilize to supplement city services. BIDs solve this problem by imposing a “tax” on property owners, which pays for the provision of supplemental services. The proposed study takes an in-depth look at the BID formation process and the characteristics of neighborhoods where BIDs form and operate, for 55 BIDs in New York City. The first part of the study will describe the neighborhoods where BIDs form and the institutional and political dynamics of the formation process. The second part will measure economic and social changes in BID neighborhoods after formation. Neighborhood indicators of interest include neighborhood wealth, income, investment, and population composition, such as race and socioeconomic class. I will employ mixed methods, using a case-study approach to collect qualitative data on BID formation experiences and econometric methods to measure both baseline neighborhood characteristics and subsequent changes.
- Sade Owolabi
- Cornell University, City and Regional Planning
Fiscal Decentralization in Kenya - Rhetoric versus Practice[ project summary ]My proposed project is to evaluate the design and implementation of an intergovernmental fiscal reform in Kenya involving the establishment of local government transfer funds through which money is redistributed to local authorities by the central government. The monies are to be used for urban development projects which must be determined through a participatory process. First, I will examine the redistributive patterns of these fiscal decentralization efforts since their inception in 1999. Where data permits, I will compare the total allocations to previous expenditures on urban development by the central and local governments. What other indicators can be used to categorize the redistribution patterns aside from geographic location? How much do these funds constitute as a percentage of local government revenue, expenditure and budgetary need? Second, I will analyze the participatory processes through which the allocation of funds takes place. What is the structure of the committees, who participates and at what level? Is the process truly participatory? How has the participation of different stakeholders shaped the prioritization and construction of projects? What impact have the projects had on service delivery mechanisms? What factors drive the success or failure of this development model?
- Yumiko T Shimabukuro
- Massachusetts Institute of Technology, Political Science
Analyzing the Provision of Public Employment Training at the Sub-National Level: The Case of the United States and Japan[ project summary ]The extant literature on the political economy of redistribution assumes that policy outcomes emerge out of contestation or competition, whether in the form of simple 'bargaining' between groups or more sinister pork barrel politics. Given the conventional wisdom, it is empirically puzzling that some local governments in the United States and Japan spend far less than their allocated public employment training funds each year and are not actively pressuring the national government to increase funding vis-à-vis others. This project examines the theoretical and empirical questions generated by the local level variation in the provision of public employment training and analyzes the link between the formation of interest organization and the formulation of redistributive policies. Preliminary research shows a strong, positive correlation between the number of small business lobby groups and the willingness of local government to provide public employment training. This suggests that the causal process identified in cross-country analysis--the most prevalent type of study on this issue area--alone yields either an incomplete or incorrect account of redistribution at the local government level. The variables these studies highlight, such as partisanship, are not significant in intra-country analysis.
- Rebecca M Tippett
- Duke University, Sociology
Institutional Determinants of Household Debt: A Comparative Study of the United States and Canada[ project summary ]Broadly speaking, my proposed project is a comparative study of the institutional causes and potential life course consequences of household debt in the United States and Canada. Although consumer debt is a growing problem for both countries, differences in usage patterns, forms of debt, and debt levels suggest that institutions structure both access to and need for debt. Thus, the driving question of my research is, "How do political-legal institutions define and structure debt in a way that is consequential for individuals and their households?" My proposed project seeks to answer this question by examining the major legislation on debt from 1970-2005 and the public intellectual discourse surrounding major legislative milestones in both the United States and Canada. Such an analysis reveals dominant narratives that will improve our understanding of why such supposedly similar political economies differ on this important outcome. As discourse on debt is often heavily imbued with morality, it also provides an opportunity to see how questions such as "what is the role of the state?" and "who is at fault for poverty (or indebtedness)?" are answered and how the answers to these questions may change over time.
- Tod S. Van Gunten
- University of Wisconsin, Madison, Sociology
The Politics of Monetary Institutions: Macroeconomic Policy, Inequality, and Expertise[ project summary ]Monetary institutions and policies have distributional impacts that make them inextricably political. The differential sectoral impacts of monetary and exchange rate policies imply divergent preferences among actors at the national and international level. At the same time, monetary institutions are administered by highly trained experts, generally economists, who claim to apply social scientific knowledge to policy. Thus, while monetary systems are enmeshed in social conflict over distribution and policy, monetary institutions are at least potentially autonomous from powerful actors and coalitions in the broader society. This proposed dissertation will investigate the politics of monetary policies by focusing on distributional conflicts and the role of experts. By illuminating the political struggles at the heart of one of the central institutions of modern capitalist society – money – I aim to contribute to a sociological understanding of the potential for and limits to economic development.