Disincentives from Redistribution: Evidence on a Dividend of Democracy

Produced by: 
University of Copenhagen
Available from: 
May 2019
Paper author(s): 
Rupert Sausgruber
Axel Sonntag
Jean-Robert Tyran
Topic: 
Politics and Economy
Year: 
2019

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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Research section: 
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