Nested Institutions and the Creation of Demand for Redistribution

Abstract

"Redistributive policies at the local level of government have been labelled a losing proposition for some time. The reasons for this labelling, however, have been largely based upon the hypothesis that local government officials and local business officials have similar incentives, none of which represent the interests of the poor. One response to this supposition has been to posit that when the ranks of the poor increase, or when the gap between rich and poor becomes unsupportable, the demand for redistribution will also increase. However, much recent work at the national and nation-state level has called such suppositions into question, providing little empirical support for a theory of demand-driven redistribution. What such studies fail to provide, however, is an adequate accounting for why such demand appears to be absent. This study examines two potential explanations for a lack of demand from the poor: 1) a lack of sufficient political representation; and 2) the endogenous structuring of policy preferences for policymakers. This is accomplished by examining office holders and their policy behavior at the local level of government in areas where demand for redistributive policies should be present. Preliminary findings indicate the structuring of policy preferences by the state is important in determining how policymakers respond to the needs of the electorate, but that the issue of representation plays a far more important role, thus providing evidence that as long as political barriers to entry remain in place, the assumption of self- interested demand driving policy remains far-fetched."