Disincentives from redistribution: evidence on a dividend of democracy

We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a “dividend of democracy” in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a v...

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Bibliographic Details
Published inEuropean economic review Vol. 136; p. 103749
Main Authors Sausgruber, Rupert, Sonntag, Axel, Tyran, Jean-Robert
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.07.2021
Elsevier Science Publishers
Subjects
Democracy
Disincentive effect
Dividends
Lab experiment
Legitimacy
Real-effort task
Redistribution
Voting
Real-effort task
Redistribution
D31
Voting
H23
Disincentive effect
Legitimacy
C92
Lab experiment
D72
Online AccessGet full text
ISSN0014-2921
1873-572X
DOI10.1016/j.euroecorev.2021.103749

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Summary:We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a “dividend of democracy” in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a vote than when it is imposed. Redistribution seems to be more legitimate, and hence less demotivating, when accepted in a vote.
ISSN:0014-2921
1873-572X
DOI:10.1016/j.euroecorev.2021.103749