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We investigate how voluntary contributions to community-specific public goods affect (a) therelationship between inequality of incomes and inequality of welfare outcomes, and (b)individuals’ material incentives for supporting income redistribution. We show that the nominaldistribution of income could give quite a misleading picture of real inequality and tensions insociety, both within and between communities. We also analyze the impact of alternativepatterns of income growth on welfare inequality, and show that, somewhat paradoxically,individuals sometimes have incentives for opposing redistribution programs from which theythemselves stand to receive income increments. This arises because of the complicating role ofpublic goods, and has strong implications for class and community solidarity.

Keywords: Community ; Public goods ; Inequality ; Distribution ; Polarization ; Class Conflict ; Ethnic Conflict

Subject(s): Community/Rural/Urban Development

Issue Date: 2001-12

Publication Type: Working or Discussion Paper

PURL Identifier:

Total Pages: 40

JEL Codes: D31; D63; D74; Z13

Series Statement: WP


Record appears in: Cornell University > Department of Applied Economics and Management > Working Papers

Autor: Dasgupta, Indraneel ; Kanbur, Ravi


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