The distribution of income is paramount in discussions of the res publica. Two normative arguments justify public concern over the distribution of income: one departing from concerns over social welfare, justifying public intervention on grounds of equity; while a second views redistribution of income as the solution to a market failure, justifying such intervention on grounds of efficiency. Although historically redistribution followed from charity, it is unlikely that charity sufficiently redistributes income, as the distribution of income represents a public good. Redistribution following from a democratic system, whereby states intervene in the income distribution through tax-and-transfer systems, brings forth the question of how much states should redistribute. Large national variation in tax-and-transfer systems exists, yet all countries devote a substantial share of tax revenues to income transfers. The main theory explaining variation across countries is critiqued with regard to its empirical success, and two new arguments explaining deviations from theory are introduced, based on the perceptions of voters.
Edited by Brigitte Unger and Daan van der Linde
Edited by Brigitte Unger, Daan van der Linde and Michael Getzner
Brigitte Unger, Loek Groot and Daan van der Linde
This introduction aims to provide a framework to address not only the normative question on what ought to be the character and business of government (or any other public authority), but also to positively evaluate shifts between private and public roles in recent history. Historical evaluations of the balance between market, state and society may serve as an alternative for models arguing that the ‘right’ configuration exists: why did current tasks evolve the way they did, and what can be learned from the past? Changes in technology or in the economic environment (such as the emergence of the European Union and globalization) can be held responsible for shifts in the optimal allocation between the public and private sphere, but there might also be a major shift of preferences regarding what should be public or private. Although it is hard to claim that the pendulum in the division between public and private, or market and government, has begun to reverse its swing, we feel it is important to give an account of the public sector in order to better understand what is at stake.