Growth, Distribution and Politics

By Guido Enrico Tabellini, Torsten Persson

August 1, 1991

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Guido Enrico Tabellini, and Torsten Persson. Growth, Distribution and Politics, (USA: International Monetary Fund, 1991) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

We start by arguing that to understand growth differences across countries and time, one needs to understand differences in public policies that affect the incentives for productive accumulation of capital, human capital, or technically useful knowledge. And to understand policy differences one needs to understand how political institutions aggregate conflicting interests into public policies. We then survey some recent work along these lines, which argues that more inequality leads to slower growth. Next, we illustrate some of the basic ideas of this work, by help of a simple model of taxation. We also present some econometric cross-country evidence, which is largely supportive of the basic ideas. We end by suggestions for further work.

Subject: Consumption, Income distribution, Income inequality, Income tax systems, National accounts, Personal income, Taxes

Keywords: Africa, Asia and Pacific, Consumption, Distribution variable, Equilibrium policy, Income, Income distribution, Income equality, Income inequality, Income share, Income tax systems, Investment rate, Personal income, Share of K., WP

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1991/078
Stock No:

WPIEA0781991
ISBN:

9781451850031
ISSN:

1018-5941

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