Why World Redistribution Fails

@inproceedings{Kopczuk2003WhyWR,
  title={Why World Redistribution Fails},
  author={Wojciech Kopczuk and Joel B. Slemrod and Shlomo Yitzhaki},
  year={2003}
}
An optimal linear world income tax that maximizes a border-neutral social welfare function provides a drastic reduction in world consumption inequality, dropping the Gini coefficient from 0.69 to 0.25. In contrast, an optimal decentralized (i.e., within countries) redistribution has a miniscule effect on world income inequality. Thus, the traditional public finance concern about the excess burden of redistribution cannot explain why there is so little world redistribution. Actual foreign aid is… CONTINUE READING

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