Political Choice, Public Policy, and Distributional Outcomes

Authors


  • The author expresses gratitude to Jim Stimson, John Stephens, David Lowery, Mike MacKuen, George Rabinowitz, Terry Sullivan, Jana Morgan Kelly, members of the political science departments at the University at Buffalo and Tufts University, and three anonymous reviewers for their helpful comments. Any remaining errors are, of course, my own. This material is based in part upon work supported by the National Science Foundation under Grant Number SES-0318044. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author and do not necessarily reflect the views of the National Science Foundation.

Nathan J. Kelly is assistant professor of political science, University of Tennessee, 1001 McClung Tower, Knoxville, TN 37996 (nathan.j.kelly@gmail.com).

Abstract

I address the functioning of the U.S. governing system by analyzing distributional outcomes from 1947 to 2000. The key question is whether public policy influences distributional outcomes. The macropolitics model and power resource theory suggest that left policies should equalize the distribution of income. I utilize single equation error correction models to assess the impact of policy on income inequality through two mechanisms—market conditioning and redistribution. Since nearly every government action influences markets in some way, I examine policy in the aggregate rather than focusing only on policies explicitly designed to redistribute income. The analysis indicates that policy influences inequality through both mechanisms, with left policy producing more equality. The results are consistent with power resource theory and strongly support the macropolitics model. Furthermore, I find that market conditioning is as important as, and works in tandem with, explicit redistribution.

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