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Taxation, redistribution, and models of fiscal politics in Latin America

Published online by Cambridge University Press:  29 August 2018

James E. Mahon Jr.
James E. Mahon Jr.*
Affiliation:
Woodrow Wilson Professor of Political Science, Williams College, Schapiro Hall, Massachusetts, USA
*
Corresponding author. Email: jmahon@williams.edu
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Extract

Latin American fiscal policy presents a stark challenge to standard analytical models of political economy. Most importantly, since about 1990 the combination of drastic inequality, electoral democracy, and weak redistributive efforts appears to contradict the economists’ workhorse, the median-voter model, which predicts significant fiscal redistribution under these conditions (Meltzer and Richard, 1981; Profeta and Scabrosetti, 2008: 70–71; Huber and Stephens, 2012). However, recent innovations – a “basic universalism” in social welfare and a couple of progressive tax reforms – might be thought to bring the region more in line with the model's predictions, or perhaps those of other approaches. In short, this field could benefit from theoretical clarification. This paper evaluates the performance of median-voter and several other models in an attempt to explain longstanding differences in fiscal policy. It compares Latin America with other world regions, first and mainly, before examining variation across the region. It then turns its attention to the new developments in policy.

Type
Taxation and Welfare Since the Third Wave of Democratization
Information
Japanese Journal of Political Science , Volume 19 , Issue 3 , September 2018 , pp. 353 - 375
Copyright
Copyright © Cambridge University Press 2018 

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