The problem of stability and the ethos-based solution

Can unconditional basic income policies be designed to generate the motivational conditions that make possible their own support? Unconditional redistributive schemes do not take formal precautions to deal with potential motivational problems that may affect their stability. For example, they are designed to give people the freedom to decide whether or not to participate in the job market. However, scholars like Philippe Van Parijs and Simon Birnbaum think that the promotion of an ethos of justice can potentially do the necessary motivational work to secure the stability of unconditional redistributive institutions. Their solution lies in changing people’s behavior through an informal motivational mechanism rather than through a formal rule or institution. This paper argues against that ‘ethos-based solution.’ It presents three reasons to distrust that solution. First, it argues that even broader and more inclusive ethoi of justice can become oppressive and violate people’s freedom. Second, it suggests that the formal and informal strategies to generate that ethos may be difficult to implement, monitor, and control. Finally, it argues that the difficulties associated with implementing and developing that ethos of justice may lead us to either preserve an undesirable status quo or to implement suboptimal redistributive policies.     

Inefficient households and the mix of government spending

A model is presented in which individuals can vote over government subsidies to a private good and over redistributive taxation. The subsidized good is purchased and shared by couples who act noncooperatively, while possibly being altruistic towards each other. The framework allows a separation of the subsidy policy from redistributive policy. In a majority voting equilibrium the subsidy is used exclusively to correct the individuals' spending pattern. The results suggest that spending on private goods should be an important item in government expenditures when there is strong positive income bias in the political process and/or when household decisions are relatively inefficient.     

The politics of redistribution in local government

Abstract. This paper deals with the politics of redistribution in local government. Traditionally, it has been assumed that redistributive policies are crucial in electoral competition and party politics, both in national and local political systems. From this perspective, differences in local competition and party systems are essential to an explanation of local redistributive efforts. Peterson (1981), however, claims that redistributive policies are excluded from the local agenda because they impair local economic prosperity. These policies are therefore not conceived as instruments in the vote-maximizing strategies of local political parties. In this paper, hypotheses on the impact of party competition and party politics on local redistribution are formulated and tested on data for 342 Dutch municipalities. The results show that, contrary to what would be expected from Peterson's perspective, municipal redistributive efforts were related to electoral competitiveness and the party system. The proposed model, however, proved to be unsatisfactory in accurately predicting the direction of the effects of these explanatory variables. These results suggest that, rather than abandoning the study of local redistribution as a non-issue in subnational politics, an effort should be made to develop a better theoretical understanding of the ways in which competition and party politics shape these policies.     

Democracy,children, and the environment: a case for commons trusts

This essay argues that our unsustainable degradation of the natural environment violates fundamental, democratic obligations to children. I argue, first, that obligations to children are clearer and more determinate than obligations to future generations. I then argue that our democratic obligations to children alone, which can be derived from a theoretically modest, procedural conception of democracy, demand substantial institutional reforms. Finally, I propose that commons trusts – which have received very little attention in the theoretical literature – are the best way of meeting these obligations.     

Divided by the Market,Divided by the State: Distribution,Redistribution and Welfare Attitudes in 47 Countries

This article examines the impact of income inequality and welfare state context on the extent to which the rich and poor share similar attitudes towards redistribution. It asks whether and how differences in attitudes, particularly those between income groups, are shaped by inequality and redistributive efforts. Based on a multi‐level analysis of individual survey data across 47 countries at three points in time, the article shows that such an interaction of individual characteristics and the macro‐context indeed matters considerably. While material self‐interest, unsurprisingly, explains part of the individual differences, the analysis also shows, for the first time, that both high inequality and strongly redistributive policies divide public opinion along the lines of socioeconomic position. Put differently, while market inequality may be associated with less cohesive attitudes, a highly redistributive welfare state does not seem to foster agreement among the public, either. These findings have important policy implications for advanced welfare states, including a renewed emphasis on ‘predistribution’ (i.e., policies that influence the primary distribution of income) in order to avoid the scenario of intensified redistributive conflicts.     

The tax-welfare mix: explaining Japan's weak extractive capacity

Abstract

Despite having the highest level of public debt in the Organisation for Economic Co-operation and Development (OECD), higher than Greece or Italy, Japan has one of the lowest aggregate tax burdens of the advanced industrial democracies. This paper asks why Japan, once described as a strong developmental state, has had such a weak extractive capacity, an inability to raise revenues to confront deficits and public debt? In contrast to the existing explanations that focus on political institutions, partisan preferences, or economic globalization, this article argues that Japan's ‘tax–welfare mix’ – the combination of taxes and redistributive welfare polices – undermined the state's long-term capacity to secure adequate tax revenue. More than just a source of revenue, taxes can be used directly to achieve redistributive goals, such as targeting low taxes and exemptions to specific groups. This study shows how Japan's tax–welfare mix diminished its extractive capacity through three mechanisms: the political lock-in of a redistributive social bargain struck around low taxes, the timing and sequencing of its tax policy and welfare development, and the erosion of public trust, which undermined tax consent. Beyond offering a new theory of extractive capacity, the tax–welfare mix explains aspects of Japan's tax structure that defy existing explanations and contributes to our understanding of the capitalist development state by highlighting the redistributive political function of tax policy and its long-term impact on state capacity.     

Share the Wealth: Redistribution Can Increase Economic Efficiency

People frequently face uncertain income and the threat of loss can inhibit economic investments. Government redistribution can insure citizens against economic losses, but its effect on people’s investment decisions depends on how they react to redistributive rules. We apply methods from experimental economics to study how a redistributive institution affects people’s investment decisions. Experiment 1 tests whether redistribution can increase economic efficiency when people face risk problems—investment opportunities that are profitable on average but could result in a loss. In a between-subject design, participants decide whether to make a risky investment either individually or under an institution that redistributes earnings equally among four group members. We find greater investment and profits when participants are required to share their earnings. In Experiment 2, we examine free-riding by comparing an institution that allows non-investors to exploit investors to an assortment institution that matches investors with investors. We find that vulnerability to free-riding suppresses investment, whereas an assortment mechanism increases investment by preventing free-riding and thereby facilitating risk pooling.     

Political systems and distortions: An empirical study

This paper studies empirically why price distortions are more prevalent in some countries than in others. We find no significant difference between democracies and dictatorships, but frequent regime changes reduce distortions. Political systems (factional-subordinate) that encourage redistributive activities (RDA) tend to have more distortions. Allowing for different effects of RDA in democracies and dictatorships, there is a positive and significant effect of RDA on distortions in dictatorships. In democracies, “distortions-destroying” lobbying seems more important since no significant relation between RDA and distortions can be found.     

The political economics of not paying taxes

This paper considers redistributive as well as political consequences of tax avoidance. When tax avoidance is possible, the official tax rate does not necessarily correspond to what individuals actually pay. This affects both redistributive outcomes as well as political attitudes towards taxation. Depending on the avoidance technology different political equilibria emerge. When the avoidance possibilities are limited, the classical conflict between rich and poor is sustained. If the tax avoidance technology is more effective, however, the equilibrium outcome can change to a situation where a coalition of poor and the very richest favor a higher tax rate. Comparing the model predictions with data on income inequality and evidence of avoidance activity, it comes surprisingly close to actual observations.     

Patriotism, taxation and international mobility

Patriotic citizens intrinsically prefer living in their native country compared to living in the Diaspora. In this paper, we analyze the consequences of such a “patriotic lock-in” in a world with international migration and redistributive taxation. One implication is that countries with more patriotic populations are associated with higher redistributive taxes. We then combine ISSP survey data with OECD taxation data and provide empirical evidence supporting this hypothesis. Our results provide a word of caution: the Treasury’s inherent interest in patriotic taxpayers may strengthen the political push for patriotism in an age of globalization and increased mobility.     

In Defence of Associative Political Obligations: Part One

Part One of this article seeks to defend the idea of associative political obligations against a number of criticisms that have been advanced opposing it. The purpose of this defence is not to demonstrate that the associative account is therefore the best explanation of political obligations, but only that the principal reasons which have been given for rejecting it are much less compelling than its critics maintain. The argument focuses in particular on the various criticisms advanced by A. John Simmons. Two general lines of defence figure especially prominently. First, it is shown how many of the criticisms in one way or another ultimately rest on the assumption that political obligations must be voluntarily acquired, when it is just this assumption that is contested by an associative account. Secondly, it rebuts the charge that the idea of associative obligations faces a particular problem because it entails the view that members must have obligations to associations or groups that are evil. While it is not claimed that the idea of associative political obligations is entirely without difficulties, it is contended that stories of its demise are greatly exaggerated, and in this respect the ground is laid for Part Two of the article, which sketches a particular account of associative political obligations.     

Crowding-out in productive and redistributive rent-seeking

This paper presents a general rent-seeking model in which participants decide on entry before choosing their levels of efforts. The conventional wisdom in the rent-seeking literature suggests that the rent dissipation increases with the number of potential participants and with their productivity of effort. In this paper, we show that this result of the rent-seeking literature is far from general and applies only when participants are relatively weak and enter the game with certainty. In the presence of strong competitors, the expected total dissipation actually decreases, since participation in the game is less frequent. We further consider the impact of competitors’ exit option, distinguishing between “redistributive rent-seeking” and “productive rent-seeking” situations. In redistributive rent-seeking, no social loss results from the fact that all competitors exit the race. In productive rent-seeking, instead, lack of participation creates a social loss (the “lost treasure” effect), since valuable rents are left unexploited. We show that the lost-treasure effect perfectly counterbalances the reduction in rent dissipation due to competitors’ exit. Hence, unlike redistributive rent-seeking, in productive rent-seeking the total social loss remains equal to the entire rent even when parties grow stronger or the number of players increases.     

Accountability in the EU's para-regulatory state: The case of the Economic and Monetary Union

This article revisits Majone's famous argument about accountability in the regulatory state in reference to the European Union's (EU) Economic and Monetary Union. We show that the EU has entered the stage of a “para-regulatory state” marked by increasing EU regulation in areas linked to core state powers. Despite the redistributive and politicized nature of these policy areas, the EU's “para-regulatory state” has continued to rely on its regulatory model of accountability, focused on decisionmaking processes, and interest mediation. In line with Majone, we describe the model as procedural and contrast it to substantive accountability – which is necessary when regulation has clear redistributive implications. Using two case studies from fiscal policy and monetary affairs, we illustrate the predominance of procedural accountability as exercised by the European Parliament and EU Courts. We complement the empirical analysis with a normative discussion of how substantive accountability could potentially be rendered in both fields.     

Civil War and the Social Contract

In this contract-theoretic modelthe government promises a transfer to itspotential opponent in return for notengaging in a civil war. Two causes ofcivil war are identified: (i) imperfectcredibility increases the cost of therequired transfer, and may make itunfeasible; (ii) asymmetric informationfaces the government with the classicefficiency/rent-extraction trade off, andcivil war is used as a screening device.This problem can be solved by creating amixed army. The model determines whether amilitary regime or a redistributive stateprevails in a peaceful equilibrium. Astatistical illustration is presented,using African data.     

In Defence of Associative Political Obligations: Part Two

This article continues the defence of associative political obligations begun in Part One. It does so by sketching an argument that supports commonplace ideas about our having a special, ethical relationship with the polity of which we are members. The argument begins by showing how non-voluntary groups in general can have value, and then seeks to identify the generic good of a polity: that good is the provision of order and security. While this is a necessary condition of associative political obligations, it is not sufficient. It needs to be supplemented by an argument explaining why we have obligations to the particular polity of which we are members. This 'associative' argument has two sides to it. The first explains how membership of a polity is for most people something like an ascribed status; that is, an identity or role that a person is taken to occupy without having chosen it. The second suggests how, through a process of identification, we incorporate membership within our self-understanding. The article concludes with some brief remarks about anarchism and why political obligation matters.     

Environmental Obligations and the Limits of Transnational Citizenship

Notions of cosmopolitan and environmental citizenship have emerged in response to concerns about environmental sustainability and global inequality. But even if there are obligations of egalitarian justice that extend across state boundaries, or obligations of environmental justice to use resources in a sustainable way that are owed to those beyond our borders, it is far from clear that these are best conceptualised as obligations of global or environmental citizenship. Through identifying a core concept of citizenship, I suggest that citizenship obligations are, by their nature, owed (at least in part) in virtue of other aspects of one's common citizenship, and that obligations of justice, even when they arise as a result of interconnectedness or past interactions, are not best conceived as obligations of citizenship in the absence of some other bond that unites the parties. Without ruling out the possibility of beneficial conceptual change, I argue that Andrew Dobson's model of ecological citizenship is flawed because there is no good reason to regard the obligations of environmental justice which it identifies as obligations of ecological citizenship, and that other models of cosmopolitan or global citizenship face a similar objection.     

Advancing the study of political cleavages through experimentation: Revisiting regionalism and redistributive preferences in Canada

The maintenance of welfare state policies requires citizen support for the provision of a social safety net through taxation and redistribution. Research has shown that a diverse political polity presents a risk to the welfare state; however, Canada bucks the trend and does not see citizen support for economic redistribution decline in response to immigration-based population diversity. Using Canada as our case, we argue that scholars of welfare state politics and redistribution should turn their attention to other sources of population heterogeneity in an effort to better understand how different political cleavages affect citizens’ redistributive preferences. We use an online experimental survey to manipulate the in-group identity of 500 Canadians. The survey enables respondents to identify with other in-group identities along regional, linguistic, income-group, and urban/rural characteristics. Our results find that while Canadians do have a strong baseline preference for redistributive behaviour, regional and linguistic cleavages moderate this outcome.     

Future generations as rightholders

Many people believe that we have obligations with respect to future generations concerning the state of the environment that we pass on to them. Apart from the practical problem of people not really acting on such beliefs, there are also conceptual or philosophical issues that make these obligations problematic. The so-called non-identity problem is especially difficult: depending on which courses of action we adopt, different people will be born in the future, which means that even future people who due to our behavior will live under fairly poor circumstances might not have any ground for complaint. Had we not behaved as we did, they would not even have existed. It is argued here that, at least within a rights-theoretical approach, the non-identity problem can be solved by moving from considering individual rights to generational rights, rights which future generations hold qua generations.