# **1. Theory and Hypotheses**

The seminal paper of Meltzer and Richard (1981) concludes that the poorer is the median voter with respect to market incomes – “ _pre-fisc_ ” incomes, prior to any redistribution – the greater her incentive to vote for redistributive policies. Their model has two implications: redistribution should rise with _pre-fisc_ inequality, but the effect should be greatest for the median voter (or at least, the median voter should be a net beneficiary of redistribution). Using data similar to those we employ below, Milanovic (2000) finds support for the first claim, but not the second: the greater is inequality in market incomes, the greater is redistribution; however, the effect is monotonic: the gains from redistribution are largest for the poorest income deciles, rather than the middle class or median voter, as Meltzer and Richard (1981) predict.

The discrepancy points to the role of collective action in redistribution. A large and rich body of research has emphasized that redistribution is a product of class confrontation, between the rich and poor, elites and non-elites or capital and labor. However, implicit in this literature is a central assumption: beneficiaries of redistribution are collectively organized. Redistribution is a policy that delivers collective benefits. These benefits are out of the reach of individuals acting by themselves. In the absence of collective organization, potential beneficiaries cannot easily punish politicians who neglect to pursue redistributive public policies.<sup>1</sup> Hence, redistribution, even in the presence of elections, requires that beneficiaries be collectively organized and that they control government.

As is well-known, left-wing parties, at least in principle, solve the collective action problems of non-elites, leading to the prediction that redistribution should be greater when left-wing governments are in power. Boix (1998), Bradley et al. (2003), Pontusson et al. (2002) and Iversen and Soskice (2006) all present evidence from advanced industrial countries that this is the case. We show that the effects of partisanship extend to a much larger set of countries (e.g., while Iversen and Soskice analyze the LIS survey data from 14 countries, we draw on data covering 61countries).

The effects of partisanship on inequality are still subject to debate. For example, Iversen and Soskice argue that partisan effects are derivative of the electoral systems of countries. Proportional representation systems encourage the coalition of the middle class and the poor against the rich, increasing both the probability that left-wing governments are in power and the amount of redistribution. The results we report below are robust to controls for electoral system, demonstrating an independent effect of party and party age on redistribution.

The crux of the argument in Iversen and Soskice (2006) is that redistribution to the poor is greater when the poor can establish a coalition with the middle class. Lupu and Pontusson (2011) extend this argument with the observation that coalition-building is a function of the proximity of middle class income shares to those of the poor or the rich. Consistent with this, they show that when the ratio of the incomes shares of the top to the middle income deciles is higher and the ratio of the middle to the lowest income deciles is lower, redistribution is also greater. Our party effects are robust to controls for similar ratios. We control for top to middle quintiles and middle to lowest quintiles, finding (in our much larger sample) more evidence supportive of Lupu and Pontusson (2011), but also that partisan and party age effects remain large and significant.

> 1 For a discussion of parties, collective action and public good provision, see Keefer (forthcoming).

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