Chapter 11 Democracy and Equality Preferences

Abstract

Abstract This chapter argues that in countries with well-functioning democracies most individuals should be “content” with the underlying income distribution. The authors derive this result from James Buchanan’s notion of a “fiscal constitution.” The authors test this hypothesis using data from the World Values Survey where respondents are asked whether “incomes should be more equal …, or do we need larger differences in income as incentives?” The authors’ empirical results indicate that the concentration of re-distributional preferences around the median response is positively related to the presence of a democratic voice.