Distributive manipulations and political stability: A theoretical analysis

摘要

We construct a model of an economy run by a populist government having overwhelming concern for maximizing its probability of reelection. Our model shows that, if voters have ideological leanings, but can also be swept away from that through a change in income redistribution, the 'opportunistic' government will end up redistributing as much as is possible to that section of the populace (urban/rural) that it thinks would retaliate more in case of less favourable endowment. If the reactivity of the two segments of voters alters in strength the government will move its redistributive variable in a manner so as to give rise to a political cycle.