Redistribution under General Decision Rules

Abstract

We study the political economy of redistribution over a broad class of decision rules. Since the core is generically non-unique, we suggest a simple and elegant procedure to select a robust equilibrium. Our selected policy depends on the full income profile, and in particular, on the preferences of two decisive voters. The effect of increasing inequality on redistribution depends on the decision rule and the shape of the income distribution; redistribution will increase if both decisive voters are 'relatively poor', and decrease if at least one is sufficiently 'rich'. Additionally, redistribution decreases as the polity adopts increasingly stringent super-majority rules.