We address two central questions that remain unresolved in the literature on inequality and redistribution. The first has been the focus of substantial prior attention: to what extent does the partisan stance of government influence redistribution? Using new data containing information on income distribution from 61 countries – far more than has been previously available – we show that left-wing governments substantially increase redistribution. The second question is new to the literature: to what extent do the characteristics of governing parties – particularly their age or level of “institutionalization” – influence how they trade off growth and redistribution?

Recent research, building on a much longer tradition of research in political science, has pointed to significant differences in the policy incentives of politicians depending on the degree to which the parties that they belong are institutionalized. Politicians in older, more institutionalized parties are, for example, more likely to be able to make credible commitments to voters and to have long time horizons. This has immediate implications for politician attitudes towards redistribution. Politicians belonging to older, more established left-wing parties are both more likely to internalize the long-run costs of taxation to support redistribution, and are less likely to need dramatic policy actions to demonstrate their commitment to redistribution. Older left-wing parties should therefore be less redistributive than younger left-wing parties.

The evidence strongly supports this contention: governments controlled by older left-wing parties redistribute less than governments controlled by younger left-wing parties. We also provide evidence on mechanisms: left-wing governments collect more taxes, but this partisan tendency is significantly more pronounced for younger parties.

New data underpin these arguments and, in and of themselves, constitute an important contribution to future research. In earlier research on inequality, data limitations compelled researchers to rely either on measures of government spending and aggregate inequality measures like the Gini coefficient. Data on government spending, though, even when the spending is apparently targeted at a redistributive objective, may yield little or no information on actual redistribution, given lack of information about the identity of beneficiaries (are they poor, middle class, or rich?). Much previous research has also been based on disposable income, which already subtracts direct taxes and adds government transfers. The absence of a “starting point” income distribution before taxes and transfers (distribution of “market income”) makes it impossible to discern the effects of redistribution on income inequality. Here we use household-level data on income distribution that allow us to calculate measures of market income inequality – the level of inequality that exists before government taxes and transfers—and thus to identify the beneficiaries of redistribution.

More recent research has addressed these problems with data drawn from the Luxembourg Income Study (LIS), which allows researchers to distinguish market and final incomes. However, the LIS data cover mostly OECD countries; research using these data has therefore been obliged to focus on as few as 14 countries. We supplement LIS with a large number of household surveys from poorer countries, using the data obtained from SEDLAC (Social Economic Development of Latin America and the Caribbean) database and the World Bank. We thus include, in most regressions, more than 55 countries and more than 310 country-years.

The next section reviews the rationale for examining the effects of party ideology, party age and the age of democracy on inequality and redistribution. The data we use to analyze these effects are a key contribution of the paper; we describe them in the next section. We then present a series of results and robustness checks.

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