Disincentives from Redistribution: Evidence on a Dividend of Democracy

Author(s)
Rupert Sausgruber, Axel Sonntag, Jean-Robert Tyran
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.

Organisation(s)
Vienna Center for Experimental Economics, Department of Economics
External organisation(s)
Wirtschaftsuniversität Wien (WU), IHS - Institut für Höhere Studien und wissenschaftliche Forschung
Publication date
2019
Austrian Fields of Science 2012
502057 Experimental economics, 502045 Behavioural economics
Keywords
Portal url
https://ucris.univie.ac.at/portal/en/publications/disincentives-from-redistribution-evidence-on-a-dividend-of-democracy(98df3ba4-4d20-4197-b551-c7e14ae34430).html