Inequalities and Preference for Redistribution

The increase of inequalities during the last 3 last decades is now a robust stylized fact. The identification of its causes is more controversial. Although there may be universal mechanisms – such as the one identified by T. Piketty in his famous book – two facts show that there are others that are not universal: 1) the increase is not the same across countries; 2) its perception differs across countries and is paradoxical as it is the most important in Europe, although inequalities have increased the least. Our goal is to explain these two facts by reference to different values across three regions. They are certainly deeply rooted in different cultures. However, our hypothesis is that more than “culture” (which is rarely well defined by economists), social, economic and political history (and, in particular, the historical building of welfare systems) matters. If these values are partly historically determined, it means that they can change. Our purpose is to promote not a convergence between these three regions with so different backgrounds but rather the circulation of ideas through a fruitful dialogue that takes into account our differences. This is a key condition for the emergence of “new values for society” as it has been the case in the postwar period for the human rights.

Inequalities are not bad per se. They may be indeed the outcomes of different efforts or talents at the individual level. Problems arise when they correspond to social reproduction or relations with little relation to one’s merit. This is where the notion of fairness is crucial. It allows justifying a certain level of inequalities. It means that ultimately the perception of inequalities may matter even more that the objective determinants of inequalities, as it directly lead to different levels of redistribution that affect the final outcome.

Our hypothesis is that it is due to different social values. More precisely, although the concept of fairness is absolute in a sense, it takes different forms across countries and history, depending on a set of variables. Past literature, which has focused on a transatlantic perspective, has emphasized the following factors: land, history [particular historical episodes such as revolutions or natural disasters], “culture”, family structure, etc. In this project, we would like to focus on the relations between welfare system, tax system and social values. The US and the European cases have been relatively well studied. Our contribution is to introduce the Japanese case in this comparative framework with the goal to challenge the common wisdom. Japan is different from other countries in the sense that the citizens on average are at the same time both more egalitarian and more conservative than in Western countries (Kluegel & Miyano, 1995). It is certainly one of the reasons of the “puzzling size of the welfare state in Japan” well studied in Takegawa (2010) and that can be also related to the low trust in government.