Ricerc@Sapienza

We model how the interplay between tax surveillance institutions and civic capital shapes taxpayers’ support for the welfare state. We show that, when tax surveillance is tight, rational civic-minded individuals express greater support for welfare spending than uncivic ones. We provide empirical evidence of these preferences using data from Italy, a country that has long posed a puzzle for public economists for its limited civic capital and large welfare state

We theoretically illustrate how the aversion to unfairness triggers an unselfish though rational demand for redistribution. This leads the well‐off to demand positive tax rates and the “poor” to reject extreme progressivity. We prove that the “rich” and the “poor” adjust their demand for redistribution in opposite ways when their sensitivity to fairness increases: while agents with above average expected income raise their demand for redistribution, agents with below average income lower it.

A society that believes wealth to be determined by random “luck”, rather than by merit, demands more redistribution. We present evidence of this behavior by exploiting a natural experiment provided by the L’Aquila earthquake in 2009, which hit a large area of Central Italy through a series of destructive shakes over eight days.

Standard redistributive arguments suggest that the impact of household income on preferences for public education spending should be negative, because wealthier families are likely to oppose the redistributive effect of public funding. However, the empirical evidence does not confirm this prediction. This paper addresses this ‘puzzle’ by focusing on the role of the inclusiveness of the education system and the allocation of public spending between tiers of education in shaping the impact of income on preferences.