Discussion paper

DP13773 Disincentives from Redistribution: Evidence on a Dividend of Democracy

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.

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Citation

Sausgruber, R, A Sonntag and J Tyran (eds) (2019), “DP13773 Disincentives from Redistribution: Evidence on a Dividend of Democracy”, CEPR Press Discussion Paper No. 13773. https://cepr.org/publications/dp13773