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Median voter and power resources revisited: a composite model of inequality

  • Mathew Y. H. Wong (a1)

This study explains redistribution and income inequality by revisiting traditional approaches. The predictions of the two dominant theories, the median voter hypothesis (the Meltzer–Richard model) and the power resources theory are regarded as contrasting, and have seldom been incorporated under a single framework. I develop a composite model of inequality by combining their core arguments within the framework of party competition. This study also analyses stages of inequality formation, namely market wage inequality and redistribution, and adds in a dynamic component to the model, completing the cycle of income distribution. The model is supported empirically with data from 18 Organisation for Economic Cooperation and Development countries from 1970 to 2009. I demonstrate the joint relevance and significance of the two theories, showing that they are not necessarily mutually exclusive and should be properly addressed from both theoretical perspectives.

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