Review of Keynesian Economics

Political contest, policy control, and inequality in the United States

Mark Stelzner * *

Keywords: inequality, free riding, policy


In a democracy where the median income is substantially less than the average, why does the poor majority not implement a significant level of redistribution? Despite fears that democracy would empower the poor majority to such ends, constituents of below average income have a mixed record of utilizing democracy to ameliorate economic inequality in the United States. How do we understand this puzzle? Why does the poor majority not maintain a constant level of redistribution in a democracy? In this paper, I provide a game theoretic answer based on historical research, which is in accord with the broad trend in both policy and economic inequality in the United States.

Author Notes

I want to thank Gerald Friedman and Peter Skott for their immense help on the history and model, respectively.

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