Ravallion (2010) measures the extent to which the existing distribution of income would constrain the redistribution needed to eliminate poverty in 90 countries, using a measure of the marginal tax rate on the rich. Lind and Moene (2011) develop a miser index to measure the extent to which there is poverty in the midst of affluence, by comparing absolute poverty to the total amount of resources available. Finally, Ceriani and Verme (2014) develop an income lever index to measure of the monetary capacity of countries to eliminate poverty by implementing different distribution rules.

Similarly, to develop a method to measure the potential DRM constraints related to the political equilibrium of countries, this paper looks at the _politics_ of DRM from the perspective of the concentration of resources in the hands of few individuals. It seeks to measure how that concentration may impact tax policy decisions and proposes a Political Influence Concentration Index. It builds in particular on three recent efforts to measure such influence. Gilens and Page (2014) use data from the United States to quantify the differences in policy influence between average citizens, economic elites, and business interests. Karabarbounis (2011) measures the relationship between inequality and redistribution and finds a one dollar-one vote political characterization in which income is associated with political influence. Finally, Igan and Mishra (2011) construct a database of political connections and contributions and find that they are positively associated with the likelihood that legislators change their position on financial deregulation.

Consider a population _N_ made of _i_ = 1 _,_ 2 _, . . . , n_ individuals, _n ∈_ N. Each individual is endowed with a level of welfare _yi ∈_ R+, which is the monetary value according to which poverty is measured (it can either be income or consumption according to the prevailing methodology in the country). Without loss of generality, let us assume that incomes are ordered, such that _y_ 1 _≤ y_ 2 _≤ y_ 3 _≤· · · ≤ yn_ .

Population _N_ can be divided into two subgroups: poor and non-poor individuals. The set of poor individuals in the population _Q_<sup>_p_</sup> is defined as the set of individuals whose welfare level is smaller than the poverty line _z_ : _Q_<sup>_p_</sup> = _{i_ : _yi < z}_ . The set of non-poor individuals in the population, _Q_<sup>_∼p_</sup> is defined as the set of individuals whose welfare is greater or equal to the poverty line: _Q_<sup>_∼p_</sup> = _{i_ : _yi ≥ z}._ Non-poor individuals, in turn, may belong to two distinct welfare groups: the middle class and the rich, defined as follows. The set of middle class individuals, _Q_<sup>_m_</sup> is defined as the set of non-poor individuals whose welfare level is below the affluence line _z_<sup>_r_</sup> : _Q_<sup>_m_</sup> : _{i_ : _z ≤ yi < z_<sup>_r_</sup> _}_ . Finally, the set of rich individuals, _Q_<sup>_r_</sup> is the set of those non-poor individuals whose welfare is above the affluence line: _Q_<sup>_r_</sup> : _{i_ : _yi ≥ z_<sup>_r_</sup> _}_ . Summarizing: _N_ = _Q_<sup>_p_</sup> _∪ Q_<sup>_∼p_</sup> = _Q_<sup>_p_</sup> _∪ Q_<sup>_m_</sup> _∪ Q_<sup>_r_</sup> . The poverty line _z_ and the affluence line _z_<sup>_r_</sup> are considered as given.

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