The Politics of Redistribution: Beliefs, Institutions and Evidence from 63 Countries
Abstract: What determines the politics of redistribution? The political economy literature suggests that redistributive policies are subject to political institutions such as electoral rules, political competition as well as the degree of fiscal and political decentralization. Others suggest that government welfare spending is correlated with subjective beliefs. In this paper, we test the hypothesis that government health expenditure - a proxy for redistributive policies - vary with the median voter’s belief about fairness. Based on data from 63 countries, we find that a stronger belief about fairness has a strong, positive, robust and significant impact on government health expenditure, controlling for political institutions. We speculate that variances in government health expenditure may be the result of different political equilibria, which in turn may be due to different beliefs.
