Authors:

  • Torben Iversen

Abstract

2021, Paper: "Growing inequality has raised concerns that democratic governments are no longer responsive to popular demands for redistribution, either because the state capacity is eroded by footloose capital, or because the wealthy subvert democracy through the power of money. In this paper we critically assess these arguments against a threeclass model of democracy that incorporates long-standing arguments about redistribution and insurance. We test this model against the alternatives on a new comprehensive dataset on income inequality from 17 advanced democracies between 1980 and 2019. We find that before taxes and transfers income inequality has risen markedly everywhere, but government redistribution has played a critical role in compensating the middle class. The United States is a large outlier, however." Link

Non-HKS Author Website - Torben Iverson