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Inequality snowballing
International Review of Law and Economics ( IF 1.216 ) Pub Date : 2024-01-03 , DOI: 10.1016/j.irle.2023.106180
Daniel Giraldo Paez , Zachary Liscow

It has long been argued that efficient policies tend to provide larger legal entitlements to the rich than to the poor. This article shows how efficient legal rules can become even more skewed against the poor over time by sowing the seeds of their own vicious cycles. Repeated application over time of these rules can lead to increasingly adverse outcomes for the poor, which the article calls “policy snowballing”.

Consider a set of polluters choosing between locating in places with rich versus poor people and facing a strict liability rule for harm to earnings. Polluters will disproportionately locate in the poor area, where they face lower damages. That disproportionate share of polluters in the poor area can make it cheaper to harm the poor in the next period, making subsequent polluters locate yet more disproportionately in poor neighborhoods, driving down the poor’s earnings further. And so on.

We identify the conditions for snowballing and explore its dynamics. When compensation for the harm is incomplete, policy snowballing can lead to spiraling income inequality. As a result, government transfers to the poor to compensate for the change in legal regime would be inadequate if calculated in a way that ignores the snowballing. The article raises the intriguing prospect that legal rules could generate state dependence in the legal costs of harm, and that efficient policymaking could be a contributing factor to increasing inequality over time.



中文翻译:

不平等现象滚雪球

长期以来,人们一直认为,有效的政策往往会为富人提供比穷人更多的合法权利。本文展示了有效的法律规则如何随着时间的推移而变得更加不利于穷人,从而播下恶性循环的种子。随着时间的推移,重复应用这些规则可能会给穷人带来越来越不利的结果,文章称之为“政策滚雪球”。

考虑一下一组污染者在选择位于富人和穷人的地方以及面临收入损害的严格责任规则之间进行选择的情况。污染者将不成比例地分布在贫困地区,在那里他们面临的损害较小。贫困地区的污染者比例过高,可能会降低下一个时期伤害穷人的成本,从而使后续污染者更加不成比例地分布在贫困地区,从而进一步压低穷人的收入。等等。

我们确定滚雪球的条件并探索其动态。当损害补偿不完全时,政策滚雪球可能会导致收入不平等加剧。因此,如果以忽略滚雪球效应的方式进行计算,政府向穷人提供的用于补偿法律制度变化的转移支付将是不够的。这篇文章提出了一个有趣的前景,即法律规则可能会产生国家对损害的法律成本的依赖,而有效的政策制定可能是随着时间的推移加剧不平等的一个因素。

更新日期:2024-01-03
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