The Impact of Collective and Competitive Veto Points on Redistribution in the Global Age

This study examines the determinants of redistribution in advanced market economies by simultaneously assessing the impact of domestic political institutions and globalization. A distinction is made between “collective” veto points and “competitive” veto points, demonstrating that not all veto points have restrictive effects. It is shown that redistribution is significantly and positively affected by collective veto points, while the opposite is true for competitive veto points, indicating that not all veto points are created equal. In addition to veto points, the effects of “globalization” are also assessed revealing that globalization is exerting little reform pressures on the welfare with strong evidence indicating that more globalization buoys welfare expenditures. While current disbursements and social transfers are positively influenced by globalization, civilian general government consumption is negatively affected and its impact is strongly mediated by competitive veto points indicating that domestic political institutions continue to fundamentally shape policy trajectories.