1981/10/01 by Allan H. Meltzer, Scott F. Richard · 5,519 citations
Economics, Econometrics and Finance · Social Sciences · #Fiscal Policy and Economic Growth #Gender, Labor, and Family Dynamics #Economic theories and models #Economics #Voting #Distribution (mathematics) #Government (linguistics) #Productivity #Computable general equilibrium #Majority rule #Income distribution #Position (finance) #General equilibrium theory #Labour economics #Microeconomics #Public economics #Macroeconomics #Inequality
paper · doi:10.1086/261013
published in Journal of Political Economy 89(5), 914-927 (University of Chicago Press)
openalex publication_date 1981/10/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/08
In a general equilibrium model of a labor economy, the size of government, measured by the share of income redistributed, is determined by majority rule. Voters rationally anticipate the disincentive effects of taxation on the labor-leisure choices of their fellow citizens and take the effect into account when voting. The share of earned income redistributed depends on the voting rule and on the distribution of productivity in the economy. Under majority rule, the equilibrium tax share balances the budget and pays for the voters' choices. The principal reasons for increased size of government implied by the model are extensions of the franchise that change the position of the decisive voter in the income distribution and changes in relative productivity. An increase in mean income relative to the income of the decisive voter increases the size of government.