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Keynes Fund

Dr Toke Aidt presented new research on relationship between democracy and redistribution at the European Public Choice Society Meeting in Rome on April 11-14.

The aim of the Keynes Fund protect "Political Representation, Market Failure and Public Policy: A Long-run Study of the United Kingdom" is to re-visit one of the classical questions in political economy: does the franchise extension lead to more redistribution and larger governments? That the answer to this question -- known as the Redistribution Hypothesis -- is yes is taken for granted in a wider range of theoretical contributions to the literature on democratization. The Keynes Fund project adopts a new statistical approach that mixes structural breaks tests with historical narrative analysis to provide fresh empirical answers and the first research results were presented at the annual meeting of the European Public Choice Society in Rome. The title of the paper, which is joint work between Toke Aidt (Cambridge), Stanley L Winer (Carleton) and Peng Zhang (Cambridge) is "Franchise extension and redistribution: evidence from the United Kingdom 1820-1913". It reports some instances in which the historical narrative and the pattern of structural breaks are consistent with the Redistribution Hypothesis, but it also finds instances where the causality appears to run the other way. This casts new doubt on one of the fundamental assumptions about the fiscal consequences of democratization in the political economics literature.

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