ECONOMY

96 political income redistribution
with transfers this will increase the “payoff” in votes per dollar of making transfers
to them. Of course, this has to be weighed against core groups’ loyalties, which may
make it unnecessary to offer them bribes. In the context of urban machine politics
in the nineteenth-century USA the assumption that the parties’ efficiency at making
transfers differed across groups and parties seems to fit well, and it is perhaps not
surprising that the urban political machines of that era tended to cultivate groups
of core supporters. In the context of twenty-first-century politics in Scandinavia
with a large government bureaucracy that is relatively insulated from direct partisancontrolwemightexpectthepartiestobeaboutequallyefficient
at making
transfers, leading to the focus of tactical redistribution on swing voters observed
by Johansson (2003).
With the exception of the Cox and McCubbins model, which takes the voting
probability functions as given rather than explicitly tracing them back to voters’
preferences, all of the models considered thus far in this section share the feature that
voters have attachments to parties that are additively separable from consumption.
Yet one of the most important objects of political conflict in the contemporary world
is the redistribution of income itself. The assumption that political preferences and
preferences over private consumption are separable is untenable when the parties’
main ideological programs are focused on the distribution of incomes.
Dixit and Londregan (1998) address this concern by constructing a model that encompasses
both “tactical redistribution” aimed at appealing to voters by offering them
higher levels of private consumption, and “programmatic” redistribution, in which
the parties’ ideological programs prescribe different levels of income inequality and
inefficiency. In this model, the overall shape of the income distribution has aspects of
a public good, but it is a public good about which voters harbor disagreements.
In Dixit and Londregan (1998) the budget constraint is augmented to encompass
the deadweight losses of taxation by making these a quadratic function of the difference
between initial allocations and actual consumption; thus redistribution is
accompanied by inevitable inefficiencies.
Rather than simply seeking to maximize votes, the parties in Dixit and Londregan
(1998) care about winning and they care about policy. Policy preferences in this model
are weighted averages of two archetypes: an extreme leftist social welfare function that
cares only about inequality, and an extreme rightist social welfare function that cares
only about avoiding the inefficiencies imposed by taxation.
Taking these one at a time, the archetypal leftist social welfare function seeks to
minimize the variation of incomes. That is to say, it seeks to make the distance of
each person’s consumption from average small, with large deviations from the average
being treated as disproportionately more serious. Dixit and Londregan capture
this idea using the sample variance of incomes, e.g. the average squared distance of
incomes from the sample mean consumption level of ¯c. Given that consumption for
each member of group g is c g ,andthatgroupg has N g members, the average squared
deviationisgivenby−S L 0 ({c g } G g =1 )where:
S L 0 ({c g } G g =1 )=−G g =1 N g (c g − ¯c) 2 (8)