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Rational ignorance and the public choice of redistribution

Larcinese, Valentino (2002) Rational ignorance and the public choice of redistribution. 443. Bance D'Italia, Rome, Italy.

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Identification Number: 443

Abstract

This paper studies the role of citizens’ demand for political information in elections and provides a possible explanation for the poor empirical support encountered by political economy models of income redistribution. It shows that incentives to gather political information may derive from its relevance to private choices. Under quite mild assumptions, the demand for political information is increasing in income. Information affects citizens’ responsiveness to electoral platforms, and vote-seeking political parties should take this into account: as a consequence, redistribution will generally be less than predicted by the median voter theorem. Moreover, in contrast with what most literature seems to take for granted, an increase in inequality will not unambigously increase redistribution. Finally, introducing endogenous information may lead some policy restrictions to have effects quite different from those intended.

Item Type: Monograph (Working Paper)
Official URL: http://www.bancaditalia.it
Additional Information: © 2002 Banca D'Italia
Subjects: H Social Sciences > HJ Public Finance
Sets: Departments > Government
Collections > Economists Online
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Date Deposited: 08 May 2008 13:50
Last Modified: 01 Oct 2010 08:53
URI: http://eprints.lse.ac.uk/id/eprint/4742

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