Mo’ votes, mo’ money: relative electoral importance, multidimensional redistribution and income inequality in the United Kingdom (2005 – 2019)

Summary

Governments use taxation and social security payments to buy votes. I argue that governments redistribute to electorally important groups defined by multiple dimensions (such as age, parental status, and income), and that this multidimensional redistribution helps explain the evolution of income inequality. Using a difference-in-differences method, I find that governments within the United Kingdom redistribute more to electorally important groups after changes in power, and that this multidimensional redistribution also has a significant impact on income inequality. The multidimensional perspective analysed here also explains patterns of redistribution that the standard unidimensional income perspective, which analyses transfers solely between rich and poor, cannot.