Abstract
We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a “dividend of democracy” in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a vote than when it is imposed. Redistribution seems to be more legitimate, and hence less demotivating, when accepted in a vote.
Original language | English |
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Article number | 103749 |
Number of pages | 30 |
Journal | European Economic Review |
Volume | 136 |
DOIs | |
Publication status | Published - Jul 2021 |
Austrian Fields of Science 2012
- 502057 Experimental economics
- 502010 Public finance
- 502027 Political economy
Keywords
- AVERSION
- COOPERATION
- Disincentive effect
- FAIRNESS
- INCOME-REDISTRIBUTION
- INDUCE
- Lab experiment
- Legitimacy
- PEER PRESSURE
- PREFERENCES
- REAL-EFFORT
- Real-effort task
- Redistribution
- TAX COMPLIANCE
- Voting
- WELFARE-STATE