setting, where the policy makers are elected on a platform favoring a redistribution agenda, political elites tend to express a different attitude towards redistribution (i.e. less progressive) than the general population, as Fisman, Jakiela, Kariv, and Markovits (2015) prove in a lab setting.

By design, a redistributive policy clearly defines (at least in the short term) winners and losers. In this simple exercise, poor individuals receiving the transfer are the winners, non-poor individuals who provide the resources for the transfers are the losers. The relative political power of winners and losers of the reforms is crucial in determining whether the redistributive policy will be designed and then implemented with the expected results.

In proposing a new tool to assess the political capacity of a country to collect domestic resources for redistribution, we follow two streams of political science and economics literature: on one hand, the contributions assessing that economic inequality is essentially political inequality (Atkinson, PIketty, and Saez, 2011; Gilens, 2012); on the other, the literature on collective action, assessing that concentrated minority interests tends to trump diffuse majority interest, due to increasing difficulties of inducing coordination and fostering cooperation as a group becomes larger (Olson, 1965 World Bank, 2017).

A disproportionate concentration of income and wealth, particularly at the very top of the distribution, may result in disproportionate power to influence the institutional design, making it difficult to implement pro-poor reforms. This undue political influence is the direct expression of income inequality when implemented policies are chosen because of the money used to influence the political process. This is particularly evident in countries where lobbying is a diffuse and regulated system, as Igan and Mishra (2011) show for the case of the United States during the years 1999-2006, when lobbying expenditure from the financial sector is found to be positively associated to the probability that legislators switch their position in favor of deregulation of that industry. Also in the United States, Gilens and Page (2014) are able to show that economic and business elites are much more effective in having preferred policies passed (or unfavored policies blocked) than mass-based interest groups. Finally, Karabarbounis (2011) proves that more money is associated with more political power using a panel of OECD countries over the period 1975-2001, supporting the argument that political influence is not uniformly distributed across voters, but that richer individuals’ votes weigh more. But inequality trumps the political voice of the poorer also indirectly. In particular, Solt (2008) shows for the case of Europe that inequality depresses political interest and participation of everyone except the very affluent in the society. In fact, as argued in World Bank (2017), citizens experiencing a persistent status of deprivation and the unresponsiveness of the state with respect to issues of importance to them may decide to _opt out_ from the political process, therefore lowering further the probability that redistributive policies are passed.

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