Abstract
This paper investigates the political support for social assistance policies in a model in which incomes are stochastic (so that welfare policies have an insurance benefit) and unequal ex ante (so that welfare policies have a redistributive effect). With self-interested voting, narrow targeting may so reduce the probability of receiving benefits for the majority that the majority prefers to eliminate benefits altogether, even though the cost of narrowly targeted benefits is close to zero. In contrast, a majority of self-interested voters always supports positive welfare benefits when the policy is targeted sufficiently broadly. If voters are somewhat altruistic, the impact of targeting on political support for welfare spending diminishes but does not disappear.
We thank Christian Brinch for skillful research assistance. In addition, we thank Matt Rabin, Glenn Loury, John Ferejohn, Vidar Christiansen, Espen Moen, Fred Schroyen, Duane Swank and two anonymous referees for their comments and the John D. and Catherine T. MacArthur Foundation and the Norwegian Research Council for financial support.
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Moene, K.O., Wallerstein, M. (2003). Targeting and political support for welfare spending. In: Glazer, A., Konrad, K.A. (eds) Conflict and Governance. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-05121-4_4
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