Soaking the Rich and the Poor? – An Empirical Investigation of Director’s Law

摘要: The theoretical analysis of redistributive policies is a corner-stone modern politicaleconomy research. A plethora models have been developed during the last three decades predicting different directions income redistribution in response to changes inequality. While theories based on standard median voter conjecture that democracies redistributed from rich poor, many “pork barrel politics”models come conclusion favors middle-classes at expense and poor alike – result famously dubbed “Director’s Law”. there large empirical literature testing implications models, hardly any cross-country research tries test validity In this paper we set out address shortcoming. aim provide comprehensive, rigorous using panel data 22 OECD countries over time period 1971–2005. Looking share gains deciles, find strong evidence for Law”: increases inequality richest poorest 20 per cent distribution towards middle class.