Limits to redistribution in a democracy: a survey

The median voter theorem suggests that a majority vote over a linear tax-cum-transfer scheme results in egalitarianism if the median of the income distribution is poorer than the average. However, although most real-world income distributions are markedly skewed to the right, radical redistribution is rather an exception than the norm. In this paper we review the theoretical arguments that explain limited redistribution as an outcome of the political process. The contributions are classified into two categories, according to whether it is the properties of the political process that prevent the poor from politically implementing their will, or whether it is in the self-interest of the poor to refrain from radical redistribution. D 2003 Elsevier B.V. All rights reserved. JEL classification: D31; D72; P16